Introduction to Contracts

CHAPTER SIX

After completing this chapter, students will be able to:

Sharing Facebook?

http://www.businessinsider.com/mark­zucker­bergs­facebook­contract­with­paul­ceglia

The  Social Network.

Sources: Reuters.com www.reuters.com

Bloomberg Technology, www.bloomberg.com

Boston Business Journal www.bizjournals.com Bloomberg Businessweek,

http://www.businessweek.com Los Angeles Times,

http://latimesblogs.latimes.com/technology/2011/05/boston­developer­wants­cut­of­winklevoss­twins­ 65­million­facebook­settlement.html

http://abcnews.go.com Business Insider,

http://www.businessinsider.com

The Uniform Commercial Code

sale of goods.

leases

Agreement.

objective

Consideration.

Capacity.

Genuineness of assent.

Legality of purpose.

Contract Formation Bilateral and unilateral contracts. bilateral contract both

unilateral contract acts

Express and implied contracts.

FIGURE 6.1  Classification of Contracts

implied­in­fact contract

unjust enrichment

Contract Performance Executory contracts. executory Executed contracts. executed.

Contract Enforceability Valid  contracts.

Unenforceable contracts.

Void contracts.

Voidable contracts.

Can I Change My Mind?

intent definiteness

Communication

Intent

offer.

intent

Gambling

Source: Blackford v. Prairie Meadows Racetrack & Casino,

Advertisements

invitations  to  deal.

A Jet Fighter from Pepsi?

Source: John D.R. Leonard v. Pepsico,

https://www.youtube.com/watch?v=ZdackF2H7Qc

Definiteness

LEGAL BRIEFCASE

Judge Mukasey

Questions

Petersen v. Pilgrim Village,

Communication

Duration  of  an  Offer

Irrevocable Offers

Option contracts.

Firm offers.

Offers for unilateral contracts.

accept, acceptance?

counteroffer,

Communication of Acceptance

Mailbox

mailbox  rule

http://www.tomwbell.com/teaching/KMailbox.pdf

Authorization

express authorization Implied  authorization

Modern View

promisee legal detriment;

promisor

LEGAL BRIEFCASE

FACTS

Judge Parker

Questions

Lampley v. Celebrity Homes,

In Re Estate of Hoffman, Hamer v. Sidway, http://www.law.smu.edu/firstday/contracts/case.htm

Adequacy of Consideration Hamer

fraud, duress, or unconscionability

Appearance of Consideration

past consideration,

Substitutes for Consideration

promissory estoppel,

Hoffman v. Red Owl Stores,

Intoxication

ratify necessaries

Mental Incompetence

void  or  voidable.

adjudged

Minority

LEGAL BRIEFCASE

Justice O'Brien

Questions

Valencia v. White,

Misrepresentation and Fraud

Stambovsky

LEGAL BRIEFCASE

Justice Rubin

Readers’ Digest

DISSENT

Questions

Milliken v. Jacono

Toy Yoda

Questions

Sources: Berry v. Gulf Coast Wings, Inc., Nevada Law

Journal

Duress

Undue Influence

Mistake

mutual mistake

unilateral mistake;

$4,934 Discount on Alitalia?

Questions

Source: The Wall Street Journal,

Illegality

FIGURE 6.2  Five Requirements of a Binding Contract.

Contracts violating statutes.

blue laws usury,

Modern Family Contract Feud

Modern  Family

Sources: Modern Family Los Angeles Times, www.latimes.com

Unconscionable contracts.

Public policy.

noncompete

exculpatory  clause,  limited  liability  clause,  or release.

LEGAL BRIEFCASE

Judge Guilford

BACKGROUND

Total Recall, Blade Runner, Minority Report, A Scanner Darkly,

ANALYSIS

1. Contractual Liability Limitations

2. Plaintiff's Arguments

2.1 Material Deviation Doctrine

Nipponkoa Ins. Co., Ltd.,  v.  Watkins  Motor  Lines,  Inc.,

Vision  Air, Vision Air,

2.2 Altered or New Contractual Terms and Agency Law

Hawaiian Paradise Park Corp.,

2.3 Even Under the New Terms Alleged, Liability Has Not Been Established

Information Control,

CONCLUSION

Questions

Xu v. Gay,

Questions

Sources: Courthouse News Service, http://www.courthousenews.com]

http://blog.al.com].

In Writing?

Statute of Frauds

Collateral contract.

The sale of land.

Promises that cannot be performed within one year.

possible,

Contracts for the sale of goods at a price of $500 or more.

Contracts in consideration of marriage.

Executor/administrator's promise.

E­mail Exchanges and Statute of Frauds

Waddle v. Elrod

Questions

Sources: Waddle v. Elrod http://www.ncsl.org/research/telecommunications­and­

information­technology/uniform­electronic­transactions­acts.aspx

Failure to Comply

www.expertlaw.com/library/business/statute_of_frauds.html

The Parol Evidence Rule

Exceptions

Contract's Terms: Paper versus Website?

Source: Fadal v. Compumachine

Assignment of Rights

FIGURE 6.3  Assignment of Rights.

Delegation of Duties

FIGURE 6.4  Delegation of Duties.

Third­Party Beneficiary Contracts

Creditor  Beneficiary

Donee Beneficiary

Incidental Beneficiary

LEGAL BRIEFCASE

Judge Adams

Subs agree & abide by all terms in the attached Exhibit ‘A’ for insurance & indemnity.

Sub­Labor Affidavit

INSURANCE AND INDEMNITY SUBCONTRACTOR AGREEMENT

Bagwell­Hughes, Inc. v. McConnell,

Aukerman v. Witmer,

Razavi v. Shackelford,

Judgment reversed.

Questions

Discharge by Conditions

Conditions Precedent

Conditions  Subsequent

Conditions Concurrent

Express or Implied Conditions

when, if, provided,

Implied­in­fact conditions

Implied­in­law conditions constructive conditions

Whose Ring?

Questions

Source: Meyer v. Mitnick,

Discharge by Performance or by Breach of Contract

Complete  Performance—No  Breach  of  Contract

executed.

Substantial  Performance—Nonmaterial  Breach  of  Contract

Unacceptable  Performance—Material  Breach  of  Contract

Duke University Breached Its Contract with a Student?

Questions

Bissessur v. The Indiana University Board of Trustees,

Source: Giuliani v. Duke University,

Advance Refusal to Perform—Anticipatory Breach of Contract

When Has a Breach of Contract Occurred? When Should the Law Intervene in a Contract?

LEGAL BRIEFCASE

Judge Ramos

Questions

Bowers v. Federation Internationale de L'Automobile,

Echols v. Pelullo,

Discharge by Lawful Excuses (for Nonperformance)

Impossibility legal  impossibility.

www.west.net/∼smith/imposbl.htm Commercial Impracticability

Discharge by Agreement

accord and satisfaction

Discharge by Operation of Law

statute of limitations

Remedies in Law breach of contract

Compensatory Damages

Sale of Goods compensatory damages

Consequential  Damages

consequence

Not a Fan?

Questions

Sources: Sports Illustrated Campus Union, college­football.si.com

newsok.com

Incidental  Damages

Nominal Damages

Punitive Damages

Rescission  and  Restitution

Mitigation

Liquidated  Damages

Remedies in Equity

Specific Performance

Injunction

Reformation

Quasi­Contract