Contractual Relationships I: Chapter 10 Flashcards
What is the purpose of a contract?
Contracts exist to make business matters more predictable
judicial restraint
a court taking a passive role and requiring parties to fulfill whatever obligations they agreed to (whether the deal was wise or foolish)
judicial activism
where a court will ignore certain provisions of a contra t or an entire agreement if the judge believes that enforcing the deal would be unjust
4 elements of a contract
Agreement, consideration, legality, and capacity
Agreement
one party must make a valid offer and the other party must accept it
Consideration
There has to be a bargaining that leads to an exchange between the parties
Legality
The contract myst be for a lawful purpose
Capacity
The parties must be adults of sound mind
Consent
Neither party may trick or force the other into the agreement
Written Contracts
Some contracts must be in writing to be enforceable
Third Party interests
Some contracts affect people other than the parties themselves
Performance and Discharge
If a party fully accomplishes what the contract requires, his duties are discharged
Remedies
A court will award money or other relief to a party injured by a breach of contract
Contract
a promise that the law will enforce
Noncompetition Agreement
a contract in which one party agrees not to compete with another in a stated type of business
Bilateral Contract
a binding agreement in which each party has made a promise to the other
Unilateral Contract
a binding agreement in which one party has made an offer that the other can accept only by action, not words
Express Contract
a binding agreement in which the parties explicitly state all important terms
Implied Contract
a binding agreement created not by explicit language but by the informal words or conduct of the parties
Executory Contract
a binding agreement in which one or more of the parties has not fulfilled its obligations
Executed Contract
a binding agreement in which all parties have fulfilled all obligations
Valid Contract
a contract that satisfies all of the law’s requirements
Unforceable Agreement
occurs when the parties intend to form a valid bargain but a court declares that some rule of law prevents enforcing it
Voidable Contract
an agreement that, because of some defect, may be terminated by one part, such as a minor, but not by both parties
Void Agreement
one that neither party can enforce, usually because the purpose of the deal is illegal or because one of the parties has no legal authority to make a contract
Promissory Estoppel
an exception to there being no contract in place; when the defendant made a promise that the plaintiff relied on
Quasi-Contract
an exception to there being no contract; the defendant did not make any promise but idd receive a benefit from the plaintiff
arguendo
that there was a clear and unambiguous promise
quantum meruit
“As much as she deserves” the damages awarded in a quasi-contract case
What is the purpose of UCC
Uniform Commercial Code; intended to facilitate the easy formation and enforcement of contracts in a fast-paced world; commerce (sale and leasing of goods, bank deposits, investment securities)
Article 2 of the UCC
governs the sale of goods; “goods” means anything movable, except for money, securities, and certain legal rights
In a mixed contract for goods and services, does article 2 govern?
Only if the primary purpose was the sale of goods
Restatement of Contracts and Restatement (Second) of Contracts
ALI - American Law Institute; 1932 and 1979; attempted to codify what its members regarded as the best rulings of contract law; not the law anywhere
When does the common law govern?
When the contract is for services, employment, or real estate
What happens when two parties make an oral agreement that the law requires to be in writing?
It is an unenforceable agreement
What happens when one party lacks capacity to make the contract ?
A voidable contract - they may escape liability.
What happens if the purpose of the deal is illegal?
It’s a void agreement - the law will ignore the deal regardless of what the parties want
When using unjust enrichment, do the courts imply a contract where none existed?
Yes
