CONTRACTS2.new

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CONTRACTS2.new

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  1. Contracts

    Slide 1 - Contracts

  2. AN AGREEMENT BETWEEN

    Slide 2 - AN AGREEMENT BETWEEN

    • TWO OR MORE PEOPLE FOR
    • WHICH THERE IS A REMEDY
    • AT LAW (in the event of a breach)…
  3. REASONABLE PERSON(THE INFAMOUS STANDARD)

    Slide 3 - REASONABLE PERSON(THE INFAMOUS STANDARD)

    • What was said…
    • How the parties acted…
    • Circumstances of the transaction….
  4. SOURCES

    Slide 4 - SOURCES

    • COMMON LAW
    • STATUTORY LAW:
    • a. Uniform Commercial Code (UCC)
    • b. Administrative Agency Regulation
  5. FUNCTION OF CONTRACT LAW

    Slide 5 - FUNCTION OF CONTRACT LAW

    • Promote Stability and Predictability
    • Assist in the Formation, Compliance, and Enforcement of Agreements
    • ------------------------------------------------------
    • Validates the existence of a Market Economy
    • Underscores a trusting GOOD FAITH and reliance on parties’ DUTY
  6. PRE-REQUISITES FOR A CONTRACT

    Slide 6 - PRE-REQUISITES FOR A CONTRACT

    • CONTRACTUAL CAPACITY (see pre-existing conditions)
    • 1. OF AGE (18+)
    • 2. CAN’T BE NUTS (MUST BE HAVING A LUCID MOMENT
    • AT TIME OF CONTRACTING)
    • 3. MUST BE A LIVING HUMAN BEING
    • 4. MUST HAVE AUTHORITY TO ACT
    • LEGAL ACTIVITY AND NOT AN IMPOSSIBILITY
    • CONTAIN ELEMENTS:
    • OFFER*
    • ACCEPTANCE*
    • CONSIDERATION
    • * AGREEMENT/MUTUAL ASSENT
  7. BASIC FORMS

    Slide 7 - BASIC FORMS

    • ORAL
    • WRITTEN
  8. FORMS OF CONTRACT

    Slide 8 - FORMS OF CONTRACT

    • BILATERAL CONTRACT
    • (Promise for a promise)
    • UNILATERAL CONTRACTS
    • (Promise for an act or performance)
  9. TYPES OF CONTRACTS

    Slide 9 - TYPES OF CONTRACTS

    • EXPRESS
    • IMPLIED
    • QUASI-CONTRACT
    • ILLUSORY CONTRACT
    • VOID/VOIDABLE CONTRACTS
    • UNENFORCEABLE CONTRACTS
  10. EXPRESS CONTRACT

    Slide 10 - EXPRESS CONTRACT

    • Direct oral or written statement
    • Conduct of the parties through a memorialized mutual agreement will suffice…
  11. IMPLIED CONTRACT

    Slide 11 - IMPLIED CONTRACT

    • Surrounding facts and circumstances indicate and agreement between the parties
    • Conduct of the parties…
  12. QUASI-CONTRACT

    Slide 12 - QUASI-CONTRACT

    • A legal fiction created by the courts when the formalities of a contract do not exist
    • Purpose: Prevent unjust enrichment
  13. PROMISSORY ESTOPPEL(another tool of the court to prevent unjust enrichment)

    Slide 13 - PROMISSORY ESTOPPEL(another tool of the court to prevent unjust enrichment)

    • A promise made without consideration may be enforced to prevent injustice, if the promissor should have reasonably expected the promisee to rely on the promise—and if the promisee does, in fact, rely on the promise to his or her detriment…
  14. ILLUSORY CONTRACT

    Slide 14 - ILLUSORY CONTRACT

    • An agreement where one party gives as consideration a promise that is so insubstantial that it imposes no obligation
    • Insubstantial obligation is unenforceable
  15. VOIDABLE CONTRACTS

    Slide 15 - VOIDABLE CONTRACTS

    • One or more parties (particularly the injured party) have the right to cancel the contract… if they so choose.
    • Contracts with minors:
    • a. Minor obligated to pay for necessities
    • of life (unjust enrichment)
    • b. Minor can ratify contract at age of
    • majority
  16. VOID CONTRACTS(NO CONTRACT)

    Slide 16 - VOID CONTRACTS(NO CONTRACT)

    • Agreements which create no legal obligation and for which no remedy will be given.
    • e.g. Illegalities (hit contracts for a crime)
  17. UNENFORCEABLE

    Slide 17 - UNENFORCEABLE

    • Meets basic requirements of a contract but may not be “enforceable” because of another legal rule…
    • e.g. Statute of Frauds or barred by a Statute of limitations
  18. Statue of Frauds

    Slide 18 - Statue of Frauds

  19. STATUTE OF FRAUDS

    Slide 19 - STATUTE OF FRAUDS

    • Any contract in anticipation of marriage
    • Any contract for over one year in length
    • Any contract involving real property
    • Any contract for which you are an executor (e.g. wills, power of attorney)
    • Any contract involving a guarantor or surety
    • Any contract for the sale of goods over $500
  20. MY LEGS

    Slide 20 - MY LEGS

  21. BASIC ELEMENTS OF A CONTRACT

    Slide 21 - BASIC ELEMENTS OF A CONTRACT

  22. BASIC ELEMENTS

    Slide 22 - BASIC ELEMENTS

    • OFFER
    • ACCEPTANCE
    • CONSIDERATION
  23. PRE-EXISTING CONDITIONS(PRE-REQUISITE SUBSET)

    Slide 23 - PRE-EXISTING CONDITIONS(PRE-REQUISITE SUBSET)

    • Must have contractual capacity:
    • 1. Age
    • 2. Legal Mental Acutity
    • 3. Must have requisite authority
    • 4. Must be human
    • Must have an intent to contract
    • Must be free of any situation or condition restricting one’s ability to contract (duress or some other form of impracticality)
  24. Offer

    Slide 24 - Offer

    • MUST BE COMMUNICATED
    • MUST BE DEFINITE AND
    • CERTAIN IN ITS TERMS
  25. ADVERTISEMENT

    Slide 25 - ADVERTISEMENT

  26. ADVERTISEMENT

    Slide 26 - ADVERTISEMENT

    • General Rule = NOT AN OFFER
    • Exceptions if:
    • a. SPECIFIC AS TO QUANTITY
    • b. INDICATES WHO CAN ACCEPT
  27. THEMAILBOX RULE

    Slide 27 - THEMAILBOX RULE

  28. MAILBOX RULE

    Slide 28 - MAILBOX RULE

    • Acceptance is effective when posted
    • (put into the mail)
    • Revocation is good only upon receipt
    • EXCEPTIONS:
    • a. Contract provides otherwise
    • b. Option deadlines
    • c. Use of other medium may change rule
  29. OFFERS THAT CANNOT BE REVOKED

    Slide 29 - OFFERS THAT CANNOT BE REVOKED

    • Option contracts supported by consideration
    • If there has been detrimental reliance by offeree that is reasonably foreseeable
    • Offeror entered into a unilateral contract then cannot revoke if performance began
    • Cannot be revoked up to 3 months if:
    • a. Contract for sale of goods
    • b. Written promise to keep open
    • c. Party is a merchant
  30. TERMINATION OF AN OFFER

    Slide 30 - TERMINATION OF AN OFFER

    • REJECTION
    • REVOCATION
    • COUNTER-OFFER
    • LAPSE OF TIME
    • OPERATION OF LAW
  31. OPERATION OF LAW

    Slide 31 - OPERATION OF LAW

    • Death or Insanity of either party
    • Destruction of subject matter prior to acceptance
    • Intervening illegality (subsequent legislative enactment)
  32. THEOPTION CONTRACT

    Slide 32 - THEOPTION CONTRACT

  33. Acceptance

    Slide 33 - Acceptance

    • MUST BE COMMUNICATED
    • MUST BE UNEQUIVOCAL
  34. MIRROR-IMAGE RULE

    Slide 34 - MIRROR-IMAGE RULE

  35. SILENCE IS NOT ACCEPTANCE

    Slide 35 - SILENCE IS NOT ACCEPTANCE

  36. WHO CAN ACCEPT?

    Slide 36 - WHO CAN ACCEPT?

  37. Consideration

    Slide 37 - Consideration

    • (SOMETHING OF LEGAL VALUE)
  38. SUBSTITUTES FOR CONSIDERATION

    Slide 38 - SUBSTITUTES FOR CONSIDERATION

    • Promissory Estoppel
    • Detrimental Reliance
    • Good Faith Modification (UCC)
  39. PROMISSORY ESTOPPEL

    Slide 39 - PROMISSORY ESTOPPEL

    • A promise made without consideration may be enforced to prevent injustice:
    • a. IF promisor should have reasonably
    • expected the promisee to rely on the
    • promise…AND
    • b. IF the promisee did actually rely on the
    • promise to his or her detriment
  40. DETRIMENTAL RELIANCE

    Slide 40 - DETRIMENTAL RELIANCE

    • Reliance by one party on the acts or representations of another,
    • Causing a worsening of the first party’s position
  41. INADEQUATE CONSIDERATION

    Slide 41 - INADEQUATE CONSIDERATION

    • PAST CONSIDERATION
    • MORAL OR ETHICAL CONSIDERATION
    • PAST PERFORMANCE
  42. DEFECTS IN CONSIDERATION

    Slide 42 - DEFECTS IN CONSIDERATION

    • Past Consideration
    • Illusory
    • Moral Obligation
    • Pre-existing Duty
    • Sham Consideration
  43. FOREBEARANCE(HAMER V. SIDWAY)

    Slide 43 - FOREBEARANCE(HAMER V. SIDWAY)

  44. THE PAROL EVIDENCERULE

    Slide 44 - THE PAROL EVIDENCERULE

  45. PAROL EVIDENCE

    Slide 45 - PAROL EVIDENCE

    • Evidence prior to or contemporaneous with negotiations and agreements that contradict, modify, or vary contractual terms is inadmissible if contract is INTENDED as a complete and final expression of the parties…
  46. EXCEPTIONS

    Slide 46 - EXCEPTIONS

    • Formation Defects
    • Conditions Precedent (Custom & Usage)
    • Ambiguous Terms
    • Consideration Problems
    • Prior Valid Agreement
    • Collateral Agreement
    • Subsequent Modifications
  47. BREACH OF CONTRACT

    Slide 47 - BREACH OF CONTRACT

    • ABSOLUTE DUTY TO PERFORM
    • BREACH OF THAT DUTY
    • CAUSATION (actual or proximate)
    • DAMAGES
  48. LIQUIDATED DAMAGES

    Slide 48 - LIQUIDATED DAMAGES

  49. NOVATION

    Slide 49 - NOVATION

    • Substitutes a NEW PARTY for an ORIGINAL PARTY to a contract
    • Need Assent of ALL parties
    • DELEGATION OF INTEREST:
    • a. Does not require agreement of all
    • parties
    • b. Does not excuse from liability
  50. DEFENSES TO A CONTRACT

    Slide 50 - DEFENSES TO A CONTRACT

  51. DEFENSES

    Slide 51 - DEFENSES

    • Absence of mutual assent:
    • a. Mutual Mistake
    • b. Misrepresentation and Fraud
    • c. Caveats to no defense:
    • (1) Unilateral Mistake (unless other knew)
    • (2) Mistake by Transmission (unless other aware)
    • (3) Latent Ambiguity (no contract if none or both
    • were aware—if one aware then binding)
  52. DEFENSES

    Slide 52 - DEFENSES

    • Statute of Frauds
    • Absence of Consideration
    • Unconscionable
    • Public Policy Defenses (illegality)
    • Lack of Capacity
  53. Questions

    Slide 53 - Questions