LEGL 215 Lecture Notes - Lecture 11: Posting Rule, Manhole, Executory Contract

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Key Points - Chapter 11 Nature and Terminology and Chapter 12 Agreement
CONTRACT VS. PROMISE
Promise: A person’s declaration that something will or will not happen in the future.
Promisor: The person making the promise.
Promisee: The person to whom the promisor made the promise.
Contract: An agreement between two or more competent parties, for valuable
consideration, to perform or to refrain from performing some act now or in the future.
Offeror: The person proposing an agreement.
Offeree: The person to whom the offeror proposes the agreement.
Genuineness of Assent: The apparent consent of both parties must be genuine.
Objective Theory of Contract: The parties’ assent is judged not by the subjective intent of
each party, but by the objective intent that a similarly situated reasonable person would
understand the parties to have.
Ex. expecting to pay for a service even if not explicitly stated
CONTRACT REQUISITES
Agreement: The offeror must offer to enter into an agreement, and the offeree must accept
the terms of the offeror’s offer.
Consideration: Something such as an act, a forbearance, or a return promise bargained for
and received by a promisor from a promisee; That which motivates a person to do
something especially in regards to the performance of a legal act.
Contractual Capacity: Both parties must be legally competent to enter into the agreement.
Legality: The contract’s purpose must be to accomplish some goal that is legal and not
against public policy.
Form: The agreement must be in whatever form (e.g.
, written, under seal) the law requires.
BILATERAL AND UNILATERAL CONTRACTS
Bilateral Contract: X promises to deliver a car to Y, Y promises to pay X an agreed price
Unilateral Contract: A unilateral contract arises when the offeree can only accept the offer
by performance (X offers Y $25 to mow X’s yard).
Once the offeree of a unilateral contract begins to perform, the offeror loses the ability to
revoke the offer.
FORMAL AND INFORMAL CONTRACTS
Formal Contract: A contract that requires a special form or method of formation to be
enforceable. For example:
Contract Under Seal: A formalized writing with a special seal attached.
Negotiable Instrument: A check, note, draft, or certificate of deposit – each of which
requires certain formalities.
Letter of Credit: An agreement to pay that is contingent upon the receipt of documents
(e.g.
, invoices and bills of lading) evidencing receipt of and title to goods shipped.
Informal Contract: A contract that does not require a specified form or method of formation
in order to be valid. The vast majority of contracts are informal.
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EXPRESS AND IMPLIED CONTRACTS
Express Contract: A contract in which the terms of the agreement are explicitly stated
either orally or in writing.
Implied-in-Fact Contract: A contract formed in whole or in part by the conduct of the
parties.
1. the plaintiff must have furnished some service or property to the defendant
2. the plaintiff must have reasonably expected to be paid and the defendant knew or
should have known that a reasonable person in the plaintiff’s position would have
expected to be paid for the service or property rendered.
3. the defendant must have had the opportunity to reject the service or property and
failed to do so
CONTRACT PERFORMANCE AND ENFORCEABILITY
Executed Contract: A contract that has been completely performed by all parties
Executory contract: A contract that has not yet been fully performed by all parties
Valid Contract: A contract satisfying the requisites – agreement, consideration, legal
purpose, capacity, and form.
Voidable contract: An otherwise valid contract that one of the parties may legally avoid,
cancel, or annul (e.g.
, a contract entered into under duress or under false pretenses);
Unenforceable contract: An otherwise valid contract rendered unenforceable by some
statute or law (e.g.
, an oral contract that, due to the passage of time, must be evidenced by
a writing to be enforceable)
Void contract: A contract having no legal force or binding effect (e.g.
, a contract entered
into for an illegal purpose).
QUASI CONTRACTS
Quasi Contract: A fictional contract imposed on parties by a court in the interests of fairness
and justice, typically to:
1. prevent the unjust enrichment of one party at the expense of the other
2. allow the party whose actions would otherwise unjustly enrich the other to recover the
value of the enrichment.
Courts typically will not allow a party who has conferred a benefit on another to recover in
quasi contract if the party conferring the benefit did so
1. officiously (e.g.
, a car dealership, without your agreeing to have it do so, applies an
expensive finish to your car after you agree to buy the car but before you take
delivery)
2. as a result of misconduct (e.g.
, a distant cousin’s murderer cannot sue you to
recover a portion of what the cousin left you in her will) or negligence (e.g.
, a driver
who falls asleep and loses control of his car, which ends up on the sidewalk in front
of you, preventing you from falling into an open manhole in the sidewalk).
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