What is a Contract and What Law Applies? Flashcards
How do you determine which law applies for a contract dispute?
If it’s for sale of goods, UCC.
If it’s for anything else, common law.
What is a contract?
A contract is a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law, in some way, recognizes as a duty (i.e., it’s a legally enforceable agreement).
How are express contracts formed?
By language, oral or written
How are implied contracts formed?
By conduct
What are quasi-contracts, and how are they formed?
Trick question. Quasi-contracts are not contracts at all. “Quasi-contract” is the name given when an unenforceable contract results in unjust enrichment.
HYPO: J. Lo orally agreed to work for Columbia Pictures for five years for $10 million per film. After “Gigli” bombed, Columbia refused to pay her for the film. The Statute of Frauds bars J. Lo from enforcing the contract.
(1) Can she recover from Columbia?
(2) How much can she recover in restitution?
(1) Yes. This is a quasi-contract, so J. Lo can seek restitution damages.
(2) She can recover the fair value of whatever benefit she conferred upon Columbia through her work. Importantly, this may be less than the $10 million she was promised. There is no contract here, so she is not entitled to any benefit under it.
What are bilateral contracts? How can a bilateral contract offer be accepted?
A bilateral contract is one consisting of the exchange of mutual promises (i.e., a promise for a promise).
A bilateral contract offer can be accepted in any reasonable way.
What are unilateral contracts? How can a bilateral contract offer be accepted?
A unilateral contract is one in which the offeror requests performance rather than a promise. The offeror-promisor promises to pay upon the completion of the requested act by the promisee. Once the act is completed, a contract is formed.
A unilateral contract, which requires full performance, occurs in only two situations:
(1) When the offeror clearly (unambiguously) indicates that completion of performance is the only manner of acceptance; and
(2) Where there is an offer to the public, such as a reward offer.
What is a void contract?
One that is totally without any legal effect from the beginning (e.g., an agreement to commit a crime). It cannot be enforced by either party.
What is a voidable contract?
One that one or both parties may elect to avoid, such as by raising a defense that makes it voidable like infancy or mental illness.
What is an unenforceable contract?
One that is otherwise valid but isn’t enforceable due to a defense (e.g., statute of limitations or Statute of Frauds)
What are “goods”? What law applies in a contract for goods?
“Goods” are all things movable at the time they are identified as the items to be sold under the contract (i.e., anything movable when identified to contract).
Article 2 of the UCC applies to sales of most tangible things, except for real estate or construction.
What is a “merchant” under the UCC?
One who regularly deals in goods of the kind sold or who otherwise by their profession holds themselves out as having special knowledge or skills as to the practices or goods involved
How do you determine which law applies in contracts involving both goods and services? (2 answers)
Determine which aspect is dominant and apply the law governing that aspect as to the whole contract.
If the contract divides payment between goods and services, the UCC will apply to the sale portion and the common law will apply to the services portion.
True or false: Every contract within the UCC imposes an obligation of good faith in its performance and enforcement.
True
