General: Contracts Overview

Question 1

Contracts

Criminal law and Torts legal system provided remedies, it also provides remedies for breaking private agreements known as contracts.

Overall framework for thinking about its major concepts, issues, and problems.

Contract law is not limited to the big picture of that overall framework,
but also gets into the specifics of individual contracts, in terms of creating them, performing them, and enforcing them in the event of breach.

Question 2

A contract is an agreement between two or more parties that creates a relationship,
with obligations for each of the parties to perform (or not perform) a particular action or set of related actions.

What makes a contract different from other agreements is that the parties to a contract intend for its terms to be enforceable.

That is, the parties who make a contract intend for there to be legal consequences for breaching their agreement.

It is Contract law that determines whether a particular agreement is an enforceable contract,

and contract law that provides remedies that a court can order when a contract is breached.

Question 3

While most contracts are not required to be in writing, it’s always a good idea to have a written contract. (the law that says when a contract needs to be in writing to be enforceable is known as the Statute of Frauds)

There are four components to a valid contract–that is, a contract that courts will enforce.

They are intent, offer, acceptance, and consideration:

● Intent – Both parties must intend to form a contract.

● Offer – One person (known as the offeror) makes a promise or proposal: “I will sell you my car for $10,000.”

● Acceptance – The person to whom that promise or proposal was made (known as the offeree) agrees to it, either by promising to perform or by performing: “I accept your offer,” or, “Here’s $10,000.”

● Consideration – Something of value that the parties have bargained for, that must be provided by both parties to a contract: For example, the car and the $10,000.

Question 4

Intent

Intent is often referred to as the “meeting of the minds.”

To have intent means that the parties to the contract intend to form a contract, and have the same terms in mind.

Question 5

Offer

Not all communications are offers.

Advertisements, estimates, and requests for bids usually don’t have the intent needed to form a contract. The same is also true for jokes and expressions of frustration.
Not all communications are acceptances.

The intent of the person accepting the offer has to be clear. Accepting some terms but not others and ambiguous statements (“I don’t know, maybe…”) indicate the intent needed is not present.

Question 6

Acceptance

At its most basic, acceptance is agreeing to the terms of the offer; it can be as simple as saying “yes” to the proposal made by the person making the offer (the offeror).

Acceptance can be made by promising to do what the offeror is proposing, or by doing what the offeror is proposing to be done (called performance).

Some contracts can only be accepted by promising to do what the offeror is proposing; other contracts can only be accepted by performing the requested act.

Where those limits apply (that is, where a contract can only be accepted by making a promise, or can only be accepted by performing), they will be indicated by the offer. There may also be other limits on acceptance, such as a time within which the offer can be accepted.

Question 7

Consideration

Consideration requires a bargained-for exchange.

That is, the parties to a contract must agree on what each of them will be providing to the other as a part of the contract.
Consideration also requires that the thing that each party will be providing to the other has legal value.
Legal value doesn’t ask about whether the price is fair or about the actual value of the thing provided.

Contracts are governed by 2 sets of laws

Uniform Commercial Code (all 50 states)
Contracts involving goods (things that are tangible and moveable, like a computer or a car) are governed by the Uniform Commercial Code (UCC).

Common law (courts / Legislative bodies) 
Contracts for other things (land, services, etc.) are controlled by the common law.

Question 8

There are four common areas that can cause problems with enforcing contracts.

● Illegality/Public Policy –

Courts will not enforce contracts if the purpose of the contract it to do something illegal or against public policy, like a contract to commit a crime.

● Capacity –

Courts will not enforce contracts if one or both of the parties did not have the capacity to form the intent needed to create a contract (due to factors such as age, duress, intoxication, or mental illness).
● Writing Required –

Certain types of contracts are required to be in writing to be enforceable (under a law called the Statute of Frauds); if such a contract is not in writing, courts generally will not enforce it.
● Unconscionable Contracts –

Courts will not enforce contracts that are so extremely unfairly one-sided that no reasonable person would enter into them.