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Contracts OutlineSp10

Contracts OutlineSp10

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Published by Justin Britton

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Categories:Business/Law
Published by: Justin Britton on Oct 21, 2010
Copyright:Attribution Non-commercial

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10/21/2010

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CONTRACTS ± SPRING 2010 [Prof. Hakes; ³Contracts´ by Farnsworth] 
1
 
I. Bases for Enforcing Promises
1. Intro
Option Contracts  Irrevocable contract because on party tenders consideration tokeep contract open until a certain time or they decide to reject the offer.
2
. Remedying Breach
Damages for breach of contract are calculated by the actual loss sustained anduncertainties are generally resolved against the wrongdoer.Expectation interests, restitution interests and reliance interests are used inmeasuring damages to put the promisee in the position in which she would havebeen had the promise been performed
3. Consideration as a Basis for Enforcement
(A) FUNDAMENTAL CONSIDERATION 
In general, a waiver of any legal right at the request of another party is sufficientconsideration for a promise.The forbearance from asserting a good faith legal claim constitutes a validconsideration.
(B) REQUIREMENT OF EXCHANGE: ACTION IN THE PAST 
Mutuality of obligation requires that consideration for a promise be bargained forand given in exchange for that promise.Past consideration and moral obligation alone are insufficient consideration to makea promise enforceable.A moral obligation is sufficient consideration to support a subsequent promise wherethe promisor has received a material benefit.
(C) REQUIREMENT OF BARGAIN 
An injured party cannot recover damages sustained from a breach of a gratuitouspromise, even if the injured party reasonably relied upon the promise and hassuffered loss and inconvenience.
 
CONTRACTS ± SPRING 2010 [Prof. Hakes; ³Contracts´ by Farnsworth] 
2
 
There is valid consideration when a non-competition agreement is signed afteremployment has begun and the employee continues to work for the employer for anappreciable length of time.
(D) Promises as Consideration 
A creditors promise to forbear the collection of a debt until such time as I want mymoney is illusory and the agreement is not enforceable against either party.An agreement made subject to the satisfication of leases does not render a contractillusory or void it for lack of mutuality because of the requirement of good faith.Good faith between merchants under the UCC means honesty in fact and theobservance of reasonable commercial standards of fair dealing in the trade.Mutuality or a return promise may be implied from the circumstances surroundingthe contract and the nature of the whole writing.
4
. Reliance as a Basis of Enforcement
Equitable estoppel bars a party from asserting lack of consideration where reliancewas induced by the party asserting there was no requisite consideration.A promise made with full expectation that some action will be taken and someexpense likely incurred will be enforceable under the action of promissory estoppel.
5. Restitution as an Alternative Basis for Recovery
A quasi-contract or implied contract is a legal fiction, where although there is nopromise or contract in fact, one will be implied by the law to remedy unjustenrichment.A plaintiff cannot use a quasi-contract or theory of unjust enrichment to substitute aknow promisor or debtor for another. Quasi-contracts will only be applied where noother remedy exists.Unjust enrichment, as a legal concept, is not properly applied in the setting of amarital relationship.
 
CONTRACTS ± SPRING 2010 [Prof. Hakes; ³Contracts´ by Farnsworth] 
3
 
II. Creating Contractual Obligations
1. Nature of the Assent
When a persons words and actions, judged under a reasonable standard,demonstrate an intent to agree to a contract, his/her unexpressed subjective state of mind is irrelevant.
2
. The Offer 
An offer is an act that must express the will or intention to allow an offeree toreasonably believe that the power to create a contract. It excludes situations thatevidence intent to deal or open negotiations.Ones state of mind is immaterial if that party outwardly manifests an assent tocontract.The court will examine the meaning of communication between the parties todetermine the intention of them.An advertisement may be considered an offer when it promises something inexchange for clear, definite action, and leaves nothing open for negotiation.Otherwise, an advertisement is an invitation for an offer.Rescission is allowed based on mistake of facts if (1) the mistake is material to thecontract, (2) the mistake was not a result of neglecting a legal duty, and (3) it wouldbe unconscionable to enforce the contract.
3. The Acceptance
Form of the offer may require some final approval; however, it does not requirenotice to the other party of that approval unless the offer expressly dictates thatrequirement. Court will construe the meaning from the obvious meaning.An offer may not be properly accepted by commencing work unless that is the modeof acceptance specifically demanded by the offer.

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