Some contract terms

Importance of "freedom of contract"

Two or more persons can agree to almost anything

Importance of "sanctity of a contract"

contracts are sacred (so to speak) and courts generally will uphold them.

Objective theory of contracts

Courts do not favor trying to consider what the parties to a contract were actually thinking when they entered into the agreement. Courts consider what the reasonable person would have thought under the same or similar circumstances.

contract

a legally binding agreement between two or more persons (or entities such as a business). The parties to a contract must either act or refrain from acting, depending on the circumstances of the agreement. meeting of the minds often referred to as "mutual assent."

bilateral contract

a promise for a return promise; an exchange of promises

unilateral contract

a promise for an act (in return); you accept by performance

Common Law v. UCC (Uniform Commercial Code)

The study of contract law is generally divided into two major parts: Common law contracts and the Uniform Commercial code. The common law includes all the judge-made legal principles involving contract interpretation. (American legal principles --> English system --> Ancient Roman Law) UCC was developed to address the increased and fast-paced buying and selling of goods and their delivery throughout the US. The UCC is a model act that all states have now adopted in its entirety or to some degree particularly with regard to the sale or lease of goods.

All contracts are described as being v_____, v_____, and v______.

Valid, Void, and Voidable

Valid contract

A valid contract is an agreement that is legal binding and enforceable.

Void contract

A void contract is one that is not binding and not enforceable.

Voidable contract

A voidable contract is binding and enforceable Express contract An express contract is the most common type of contract because the parties have explicit (clear) terms. This can be written or oral.

Implied contract

An implied contract focuses on the words or conduct between the parties as opposed to whether there is a clear intent to form a contract. Courts are usually asked to imply a contract to prevent unjust enrichment by a party to another "as if" there was a contract, when in fact there really was no an express agreement between the parties at all. Implied contracts are considered in two ways: implied-in-law (sometimes referred to as Quasi contracts). A contract in which a court decided that the parties acted if they had one.

Implied-in-fact contract

An implied-in-fact contract is where the agreement of the parties is indicated by their conduct rather than an explicit agreement.

Implied-in-law contract

An implied-in-law contract is one in which an obligation is imposed by a court to avoid injustice or to prevent unjust enrichment. No promise was actually made in an implied-in-law contract.

Doctrine of promissory estoppel

The doctrine of promissory estoppel is used b courts in extraordinary cases only and to avoid unjust results where an injustice can be avoided only by enforcing the promise. Under the doctrine of promissory estoppel (sometimes referred to as detrimental reliance), a party who has reasonably relied to his or her detriment based upon another's promise may still be able to enforce that promise (or part of the promise) to the extent of the reliance. The plaintiff must demonstrate that the promise was made, however, and this can be extremely difficult.