Documente Academic
Documente Profesional
Documente Cultură
SOCIETY
11th
Edition
McGraw-Hill
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Learning Objectives
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Learning Objectives
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Learning Objectives
Learning Objectives
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Role of Contracts in a
Complex Society
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question
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Features of a Legally
Enforceable Contract
Agreement
Parties agree based on an offer by one and an acceptance by the
other
Consideration
Bargained-for legal value that one party agrees to pay or provide
to secure the promise of another
Capacity
Legal ability of the parties to enter into a contract
Genuineness of assent
Parties must agree to the same thing
Legality of purpose
Object of the contract must not violate the law or public policy
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Agreement: Offer
the offer
Communication of the offer to the offeree
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Case: Definiteness
Case
Vian v. Carey
1993 U.S. Dist. Lexis 5460 (U.S. Dist. Ct.
S.D.N.Y. 1993)
Issue
Vian claimed that Mariah Carey agreed
Irrevocable Offers
Option contracts
Offeror promises to keep an offer open for a
specified period
Offeree pays consideration in return
Firm offers
Offeree is bound to the promise even without the
paying the consideration
Offers for unilateral contracts
Offeror attempts to revoke a unilateral offer after
the offeree has begun to perform
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Agreement: Acceptance
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Agreement: Acceptance
Authorization
Offeror can specify an exclusive manner to
communicate the acceptance
Express authorization
Implied authorization
Modern view
Under UCC, offeree is free to accept in any
reasonable manner within a reasonable
period if there are no specific instructions
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Consideration
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Case: Consideration
Case
Hamer v. Sidway
27 N.E. 256 (N.Y. 1891)
Court of Appeals
Issue
W.E. Story Sr. had promised $5,000 to W.E.
Consideration
Adequacy
Legal sufficiency depends on whether the
Appearance
Certain agreements can be accompanied
Consideration
Substitutes
Doctrine of promissory estoppel - Requires:
Promise on which the promisor should
expect the promisee to rely
Promisee justifiably relied on the promise
Injustice can be avoided by enforcing the
promise
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Capacity
Intoxication
Contract can be nullified if the person was sufficiently
intoxicated
Mental incompetence
Agreement involving a mentally incompetent person is
void or voidable in most cases
Minority
Minors have the right to rescind contracts and the right
of recovery for everything given up in meeting the
terms of the contract
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Case: Minority
Case
Dodson v. Shrader
824 S.W.2d 545 (Tenn. S.Ct. 1992)
Circuit court
Issue
Dodson sued Shraders to rescind the
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Genuineness of Assent
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Case: Misrepresentation
Case
Stambovsky v. Ackley et al.
169 A.D.2d 254 (S.Ct. N.Y., App. Div., 1st
Dept. 1991)
Issue
Plaintiff discovered the house he
Legality of Purpose
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Case
Hanson v. America West Airlines
544 F.Supp.2d 1038 (U.S. Dist. Ct. Central
Issue
David Hanson lost his valuable robotic head
one year
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$500 or more
Contracts in consideration of marriage
Executor/administrators promise
Failure to comply
Incomplete oral contracts that fail to
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Exceptions
Adding missing terms to an incomplete
written contract
Explaining ambiguities in a written
contract
Proving circumstances that would
invalidate a written contract
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Third Parties
provisions
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Third-Party Beneficiary
Contracts
Case
Jimenez v. Gilbane Building Company, et al.
693 S.E.2d 126 (Ga. Ct. App. 2010)
Trial court
Issue
Belfor and Gilbane have claims against Gill
Plumbing
Gill has a third-party claim against Jimenez
for the for the costs of remediation and repair
of a plumbing installation
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Discharge
Discharge by Conditions
Conditions precedent
Clause specifies that an event must occur before
the parties to the contract are obliged to perform
Conditions subsequent
Clause excuses performance if a future event
transpires
Conditions concurrent
Contract specifies that the parties are to perform
their duties at the same time
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Discharge by Conditions
Express conditions
Explicitly agreed to by the parties
Implied-in-fact conditions
Derived by court from the conduct of parties and
circumstances surrounding the bargain
Implied-in-law conditions
Imposed by the court on the contract to avoid
unfairness
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Discharge by Performance or
Breach of Contract
Complete performance
No breach of contract
Substantial performance
Nonmaterial breach of contract
Unacceptable performance
Material breach of contract
Advance refusal to perform
Anticipatory breach of contract
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Case
Castillo v. Tyson
701 N.Y.S. 2D 423 (N.Y. S.Ct. App. Div. 2000)
Motion court
Issue
Pay-per view customers sued Tyson, fight
accomplished by anyone
Commercial impracticability
Exceptional and unforeseeable events
Discharge by agreement
Achieved when a new agreement is arrived
Remedies in Law
Compensatory damages
Plaintiff is entitled to recover a sum equal to the
actual damages suffered
Consequential damages
Victim can recover direct and indirect losses
incurred due to the breach
Incidental damages
Costs incurred by the victim in arranging a
substitute performance or reducing sustained
damages
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Remedies in Law
Nominal damages
Court awards an insignificant sum to illustrate the
wrongfulness of the breach
Punitive damages
Awarded to the injured party when the breaching
partys conduct is reprehensible
Rescission
Returning the parties to the positions they occupied
before entering the agreement
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Remedies in Law
Restitution
Returning goods and property that were transferred
under the contract
Mitigation
Nonbreaching party is required to take reasonable
steps toward minimizing damages
Liquidated damages
Parties agree in advance about the measure of
damages
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Specific performance
Court orders the breaching party to perform its obligations
as per the contract
Injunction
Court may require or forbid a party to perform a specified
act
Reformation
Court rewrites the contract where parties true intentions
are imperfectly expressed
Quasi-contract
Court implies a contract as a matter of law to prevent
unjust enrichment
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