Chapter 9

Objectives are to enhance predictibility and certainty of contracts. (result: contracts hard to make & hard to break)

Objectivies are to achieve justice and fairness in individual cases. (result: contracts easier to make & break)

both parties seiously intend to enter into a binding agreement

Each party to a contract must receive "something of value" in return for his/her promise.

The purpose of a contract must not be lawful and not violate public policy

Each party to a contract must have a minimal level of cognitive ability.

Applies to contracts for the sale of goods.

• - Personal Property (not real)
• - Movable
• - Tangible

Applies to all other types of contracts other then UCC. (e.g. contracts for employment, services, insurance, sale of real property, and sale of intangibles like patents and trademarks)

Compilation of common law contract principles

The terms are stated in words (oral or written)

The terms are implied from the conduct of the parties under the circumstances

A promise is made in return for another promise (contract is formed when the return promise is made)

A promise is made in return for the performance of a requested act (the contract is formed only when the requested act has been fully performed).

A contract that meets all of the essential elements

Has no legal effect (no contract created). E.g. drug deal is not enforceable contract.

Situation where at least one of the parties has the option to avoid (or ratify) the contract.

A completed contract that has been fully performed by all parties

A contract that has not been fully performed.

Required to be in a particular form to be valid

All other contracts (beside formal)

If neccessary to do justice, a court will enforce an otherwise unenforceable promise. (Elements: if the promissee reasonably relied on the promise and if the reliance was substantial, then justice requires enforcing the promise even though it is not a contractual promise)

An obligation to pay for a benefit received that is imposed by law to avoid injustice; to prevent unjust enrichment. (Elements: the recipient is aware of a benefit he/she has received, and the recipient has kept the benefit when under the circumstances justice requires him/her to pay for it)

Remedy is awarded to place the plaintiff where he should have been had the contract been fully performed. (90% of contracts are performed)

• 1.) Serious Intent (mutual)
• 2.) Capacity (age/mental status)
• 3.) Must be Legal Contract (e.g. no drug deals)
• 4.) Consideration (not expected to be leagally bound to get something for nothing)
• ...AND if all these have been met...
• 5.) SOME contracts must be in writing