1. CONTRACTS: Creation

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rubidoux
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147952
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1. CONTRACTS: Creation
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2012-05-18 13:14:02
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contract creation
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  1. CONTRACT DEFINED
    A contract is a promise or set of promises, for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes a duty.
  2. GOVERNING LAW
    Common law generally governs contracts, but special rules have been developed involving the sale of goods (UCC art2) and art2 prevails in that area.

    ART 2 DEFINITIONS:

    -- sale -- a contract in which title to goods passes from the seller to the buyer for a price

    -- goods -- all things movable at the time they are identified as the goods to be sold under the contract; thus art2 does not apply to sales of real etate, services, or intangibles, or to construction contracts

    -- merchant -- one who regularly deals in goods of the kind sold or who otherwise by his profession holds himself out as having special knowledge or skills as to the practices or goods involved.

    If a sale involves goods and nongoods, a court will determine which aspect is dominant and apply the law governing that aspect to the whole contract. If the contract divides payment between goods and services, then art2 will apply only to the sale portion.
  3. TYPES OF CONTRACTS:
    AS TO FORMATION
    EXPRESS CONTRACT -- formed by language, oral or written

    IMPLIED IN FACT CONTRACT -- formed by manifestation of assent other than oral or written language, ie by conduct

    QUASI-CONTRACT or IMPLIED IN LAW CONTRACT -- not contracts at all, they are constructed by courts to avoid unjust enrichment by permitting the plaintiff to bring an action in restitution to recover the amount of the benefit conferred on the defendant
  4. TYPES OF CONTRACTS:
    AS TO ACCEPTANCE
    BILATERAL CONTRACT -- exchange of mutual promises -- each party is both promisee and promisor

    UNILATERAL CONTRACT -- acceptance by performance -- the offeror requests performance rather than a promise, the offeror-promissor promises to pay upon the completion of the requested act by the promisee. Once the act is completed, the contract is formed.

    Only two situations are unilateral --> (1) where the offeror indicates that completion of performance is the only manner of acceptance, or (2) where there is an offer to the public, such as a reward, which so clearly contemplates acceptance by performance rather than a promise.

    Most contracts are bilateral --> unless clearly indicated otherwise by the language or circumstances, all offers are doubtful or indifferent offers, which means that they may be accepted by promising or beginning performance.
  5. TYPES OF CONTRACTS:
    AS TO VALIDITY
    VOID CONTRACT -- one that is totally without any legal effect from the beginning, ie, an agreement to commit a crime, cannot be enforced by either party

    VOIDABLE CONTRACT -- one that one or both parties may elect to avoid by raising a defense that makes it voidable such as infancy

    UNENFORCEABLE CONTRACT -- an agreement that is otherwise valid but which may not be enforceable due to various defenses extraneous to contract formation, such as the statute of limitations or statute of frauds
  6. CREATION OF CONTRACT
    To decide whether there is a contract consider the following:

    • -- whether there is mutual assent
    • -- consideration or some substitute for consideration
    • -- defenses to formation of the contract

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