CONTRACTSCONTRACTS

Chapter 9Chapter 9

Introduction to ContractsIntroduction to Contracts

CONTRACTSCONTRACTS

A AGREEMENT between two or more A AGREEMENT between two or more persons the PERFORMANCE of which the persons the PERFORMANCE of which the law considers to be an OBLIGATION and law considers to be an OBLIGATION and for the breach of which the law will impose for the breach of which the law will impose a REMEDY.a REMEDY.

Reflects social valuesReflects social values

Two Bodies of Contract LawTwo Bodies of Contract Law

Uniform Commercial CodeUniform Commercial Code

Sale of goods (tangible personal property)Sale of goods (tangible personal property)

Common LawCommon Law

Contracts not covered by the UCC Contracts not covered by the UCC

( Services, real estate, employment, insurance, ( Services, real estate, employment, insurance, etc.) etc.)

Basic Elements of a ContractBasic Elements of a Contract

OfferOffer

AcceptanceAcceptance

ConsiderationConsideration

CapacityCapacity

LegalityLegality

TYPES OF CONTRACTSTYPES OF CONTRACTS

BilateralBilateral: Promise for a promise: Promise for a promise

UnilateralUnilateral: Promise for an action: Promise for an action

ExpressExpress: Terms are explicitly stated in words.: Terms are explicitly stated in words.

(Oral or written)(Oral or written)

ImpliedImplied: Terms indicated by conduct of the : Terms indicated by conduct of the parties.parties.

Types of ContractsTypes of Contracts

ValidValid: Contains all of the necessary : Contains all of the necessary elements of a contract. elements of a contract.

VoidVoid: Missing one or more of the : Missing one or more of the necessary necessary elements for a valid elements for a valid contract.contract.

VoidableVoidable: Valid contract which may be : Valid contract which may be avoided by one or both parties by an avoided by one or both parties by an action of rescissionaction of rescission

Types of ContractsTypes of Contracts

ExecutedExecuted: Fully performed by both : Fully performed by both parties.parties.

ExecutoryExecutory: Not fully performed.: Not fully performed.

Quasi ContractQuasi Contract

Implied in law contract.Implied in law contract.– Benefit conveyedBenefit conveyed– Receiver of benefit is aware of benefitReceiver of benefit is aware of benefit– Unjust to allow benefit to be retained without Unjust to allow benefit to be retained without

payment.payment.

Promissory EstoppelPromissory Estoppel

A promise which the promisor should A promise which the promisor should reasonably expect to induce action or reasonably expect to induce action or forbearance on the part of a third person forbearance on the part of a third person and which does induce such action or and which does induce such action or forbearance is binding if injustice can be forbearance is binding if injustice can be avoided only be enforcement of the avoided only be enforcement of the promisepromise