Week 1

Sources of Contract Law Common Law Uniform Commercial Code

Contract

Set of legally enforceable promises, entered into by two or more parties, to make their dealings predictable and to allocate risk.

Contract Requirements

To be enforceable, a contract must meet certain requirements: Agreement Consideration Capacity Legality

Types of Contracts: Express or Implied

Express contract: has its important terms explicitly stated.

Implied contract: implied from the words and actions of the parties, even if they never expressed an agreement.

Types of Contract:Unilateral or Bilateral

Unilateral contract: contract formed when one party acts in response to other party’s promise

Bilateral contract: contract in which both parties make promises

Gifts

A gift is a completed transfer of property without consideration.

A gift becomes irrevocable when: A donor with capacity has voluntarily made a transfer that has been accepted by the donee

Promissory Estoppel

Promissory estoppel is a legal theory for enforcing a promise if: The defendant knew the plaintiff would

rely on the promise The plaintiff did rely on the promise; and Enforcement is necessary to avoid

injustice

Quasi-Contract Quasi-contract is a theory for avoiding unjust

enrichment in situations in which a contract did not actually form.

Quasi-contract is a legal theory, based in equity, for compensating a plaintiff if: Plaintiff gave some benefit to the defendant Plaintiff expected to be paid Defendant had knowledge of plaintiff’s actions and

expectations; and Defendant would be unjustly enriched if not

required to pay

Common Law

Law from judicial decisions Governs contract disputes involving

real property, intangible property, and services

Uniform Commercial Code

Developed in response to the need for a more modern, uniform body of law.

Drafted to cover transactions that often have roots in different states, including the sale (and, in some states, lease) of moveable items (also called personal property, chattel, or goods).

Uniform Commercial Code

UCC covers transactions involving the following: Negotiable instruments Banking Documents of title Investment securities Bulk sales Letters of credit

Goods

Goods include items with a physical existence that are moveable at the time of identification to the contract.

Good Faith

The UCC definition of good faith: as applied to merchant, means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.