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[CONTRACT FORMATION]
LEARNING PLAN 3LA3100
[CONTRACT FORMATION]
Contract:An agreement between two or more persons which
creates an obligation to do or not to do a particular thing.
Like tort law, contract law is mainly state law (it is not normally in federal jurisdiction). So at its most basic, a contract is an agreement that is legally enforceable.
LA3100L P 3
[CONTRACT FORMATION]
Contract Classifi cationExpress Contract An express contract is a contract in which the contracting parties expressly state the terms of the contract, either orally or in writing.
Implied Contract An implied contract is a contract which is implied
or inferred by the actions or conduct of the parties, without being expressly stated.
LA3100L P 3
[CONTRACT FORMATION]
Contract Classifi cation
Bilateral Contract A bilateral contract is a contract in which each contracting party makes a promise to the other contracting party.
Unilateral Contract A unilateral contract is a contract in which one
contracting party makes a promise to the other contracting party in return for an act by the
other party.
LA3100L P 3
[CONTRACT FORMATION]Contract Classifi cationExecutory Contract An executory contract is a contract in which one or both contracting parties are required to perform some act in the future. The contract is not yet completed.
Executed Contract
An executed contract is a contract that has been fully performed by both contracting parties and nothing
remains to be done by either party. The transaction is complete.
Valid Contract
A valid contract is a contract that fulfills all the requirements of a contract and is enforceable.
LA3100L P 3
[CONTRACT FORMATION]Elements of a Contract1. OFFERAn offer is a promise made by the offeror (the person making the offer) to do something, or not to do something.
2. ACCEPTANCEAn offer must be accepted by the offeree to create a
contract. If an offer is not accepted, then no contract is formed. Once an offeree accepts an offer, the offeree
cannot change or withdraw the acceptance.
3. CONSIDERATIONThe value bargained for by the parties.
LA3100L P 3
[CONTRACT FORMATION]
LEARNING PLAN 3LA3100
THE OFFER
[CONTRACT FORMATION]
Requirements of an Offer1. Present Intent
Did offeror intend to make an offer?
2. Definite Terms
Does offeree need only say "I accept“?
3. CommunicatedWas offeror just “thinking about it”?
LA3100L P 3
[CONTRACT FORMATION]
Offers-Exceptional situations
1. Firm Offer
Offer open for specific time-no more than 90 days
2. Unilateral Offer
Offer accepted when offeree starts job.
3. Option Contract
Earnest money deposited to keep offer open.
LA3100L P 3
[CONTRACT FORMATION]
Two ways to Terminate an Offer
1. Termination by action/inaction a. Rejectionb. Revocationc. Expirationd. Assumption (reasonable time passes)
LA3100L P 3
[CONTRACT FORMATION]
Two ways to Terminate an Offer
2. Termination by operation of law a. Death/incompetence of party b. Destruction of offered property c. Illegality of transaction
LA3100L P 3
[CONTRACT FORMATION]
LEARNING PLAN 3LA3100
ACCEPTANCE
[CONTRACT FORMATION]
Requirements of Acceptance
An acceptance must be:
1. Unequivocal and Unconditional
2. Communicated by requested or reasonable method
LA3100L P 3
[CONTRACT FORMATION]Acceptance: Exceptional Situations
Unilateral contract:
Acceptance shown by performance of an act, not written communication.
Examples:
Rewards, Partial Performance in Construction
LA3100L P 3
[CONTRACT FORMATION]
LEARNING PLAN 3LA3100
CONSIDERATION
[CONTRACT FORMATION]
Requirements of Consideration
1. “Bargained-For Exchange”:
Bilateral contract- Exchange promises.
Unilateral contract- Exchange promise for act.
Gift- No expectation of returned favor.
2. “Legal Value”
Nonrequired act
Refrain from acting
LA3100L P 3
[CONTRACT FORMATION]Consideration: Exceptional Situations
Implied Contracts-to prevent injustice
1. Quasi-contract “Innocent" party compensated for reasonable value of the thing sold, or services conferred.
2. Promissory estoppelPromise made that would reasonably causes
another to act or forebear from acting to his or her detriment.
LA3100L P 3
[CONTRACT FORMATION]
LEARNING PLAN 3LA3100
HOW TO BRIEF A CASE
How To Brief A Case
“IRAC”Issue: What is the controversy?
Rule: What cases does the court rely upon to make it’s decision?
Analysis: Balancing of the facts and law.
Conclusion: The answer to the controversy.
GARNER v. KOVALAK
Issue: What is the controversy? Garner claims the court should have
found Kovalak responsible for the damage to his trees under the theory of trespass quare clausum fregit.
So the issue is, Whether Kovalak is responsible for tree damage pursuant to quare clausum fregit (trespass).
Garner v. Kovalak- cont’d
Rule: quare clausum fregit:
Under that theory: [I]t is necessary for the plaintiff to prove only that he was in possession of the land and that the defendant entered thereon without right, such proof entitling the plaintiff to nominal damages without proof of injury, and upon additional proof of injury to products of the soil, the plaintiff is entitled to compensatory damages. Hawke v. Maus, 141 Ind. App. 126, 131, 226 N.E.2d 713, 717 (1967).
Garner v. Kovalak- cont’d
Conclusion:
As a trier of fact could reasonably find Kovalak’s action was impelled by the brown Cadillac, we decline to hold as a matter of law his act was intentional.
Garner v. Kovalak- cont’d
Analysis Kovalak’s actions were not intentional He swerved into the tree while avoiding
a collision Insurance company found him not liable
for the accident An intentional act is one ―resulting for the actor’s will directed to that
end.‖ Black’s Law Dictionary 25 (7th ed. 1999). ―An act is intentional when foreseen and desired by the doer, and this foresight and desire resulted in the act through the operation of the will.‖ Id. An act done intentionally is also done voluntarily. Id. at 1569. An act is voluntary if it is ―not constrained, impelled or influenced by another.‖ Webster’s 3rd New International Dictionary Unabridged 2564 (G. & C. Merriam Co. 1976).
[CONTRACT FORMATION]
LEARNING PLAN 3LA3100