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What is a contract?
an agreement that is legally enforceable
What are the 5 elements that are essential for an agreement to be a contract?
- mututal serious intent
- capacity of the parties involved (age, mental ability)
- legality of the purpose (cannot be for an illegal agreement)
- consideration (receive sth in return)
- in writing (only by certain agreements)
What are the remedies for breach of contract?
- monetary -- putting the plaintiff in the position he/she would have been if the contract had been fully performed
- performance -- court ruling to enforce performance
Why is there a necessity for a system to enforce contracts?
reliability (if there is a reliable system, businesses are more likely to enter into contracts)
Which state did not adopt the UCC and why?
Louisianna -- its legal system is derived from the French legal system
What are the 3 requirements for something to be considered a good?
- personal property
Example: mobile home, cell phone, laptop etc.
What kind of contracts are covered by the UCC?
contracts for the sale of goods
What does UCC stand for?
Uniform Commercial Code
Which two laws apply to contracts?
- UCC (sale of goods)
- common law (all other)
What is the predominant purpose test and what is it used for?
- It is used to determine the main purpose of a contract if it is a mix of sale of a good and something else, to determine the law the contract is covered under.
- What is the major purpose of the contract? Sale or other part?
Example: purchase of a tv and its installment - predominant purpose is the sale, so it is covered under UCC
What are the two appoachment methods to contract law?
- rule oriented
- result oriented
What is the rule oriented approach to contract law and its objectives?
- using strict rules in deciding contract disputes
- contracts are hard to make and hard to break
- objective: enhance predictability and certainty of contracts
What is the result oriented approach to contract law and its objectives?
- using concepts like "justice" and "fairness" in deciding contract disputes
- contracts are easier to make and easier to break
- objective: achieve justice and fairness in individual cases
What is the Restatement of Contracts?
a compilation of common law contract principles
What are the 5 classifications of contracts?
- express and implied contracts
- bilateral and unilateral contracts
- valid, void, voidable, and unenforceable contracts
- executed and executory contracts
- formal and informal contracts
What is an implied contract?
terms of the contract are implied by the behavior of the parties under the circumstances at the time
What is an expressed contract?
the terms of the contract are stated in words, either oral or in writing
What is a bilateral contract?
a promise is made in return for another promise
the contract is formed the moment the return promise is made
What is a unilateral contract?
a promise is made in return for the performance of a requested act
the contract is formed the moment the requested act is fully performed
What is a valid contract?
a contract that meets all of the essential elements
What is a void contract?
a contract that has no legal effect, because it has not been created in the first place (eg under duress)
What is a voidable contract?
a contract where at least one of the parties has the right to avoid the contract (eg. fraud => victim's choice)