American Contract

Law I
Zeynep Büşra Göçerler
CourseraXMEF University
Contents
-For the contracts
-Uniform Commercial Code (UCC)
-Mandatory / Invariant Rule , Goodwill Rule
-Contra Proferentem Principle
-Estoppel
-Ex ante
-Unconsciousness
-Coase Theorem
-Review / How to create a workable contract?
-Paraphrasing
-Fraud Statute
-Advertising and Contract
-Mirror image rule VS Reconstruction
For the contract:
★ Prerequisites
★ Offer and acceptance
★ Mutual consent in contracts
★ Types of compensation
★ Mandatory rules against default
★ Rules of liability to property
★ Coase Theorem
★ Shamp’s trust approach
Uniform Commercial Code (UCC)
-Commercial Code.

★ Purpose : to establish a nationwide standard in business activities.

-Judges may not have to enforce it but many supreme courts find the provisions
convincing and explicitly rely on certain provisions, these provisions are binding
in the states that have been adopted.

-It’s one of the primary sources of contract law in the US along with common law.
Mandatory / Invariant Rule

Common law has set unchangeable limits on the maximum amount of damage
that parties can contract:

-liquidated damages / restrictions

-maximum term limits of non-competitive agreements

Goodwill Rule

-It’s considered a mandatory part of every deal.

-The standards of goodwill reasonably change with agreement.

Contra proferentem principle
-It provides that statements that aren’t clear enough will be interpreted against
the organizer of the contracts.

-It aims to punish inattentive draft.

★ Criminal defaults are deliberately set in a way that the parties don’t want to
encourage the parties to inform each other or a third party, especially the
courts.
Estoppel

★ In the contract the goodwill protects the person who used the bad and was
harmed. It helps make-up for one’s economic losses.
★ It’s a legal principle that keeps people from breaking their promises.
★ It’s a registered objection.
Ex ante

-The moment the movement is made before the desired event occurs.

-Legislators use it to announce rules that will be applied prospectively, i.e. in the
future.

-Ex ante analysis limits breach damages without disclosure of privacy and
security.
Unconsciousness

-Common law acknowledges that unreasonable contracts are unenforceable.

-If there is an unconscious element in the making of a contract, the contract

shouldn’t be made.

-If contracts that are a condition of the format aren’t made in accordance with
the format, the contract is considered invalid.
Security Contract / Security Rate
-It’s not a pay order.

-Giving the property a share of security means selling part of the necessary
transaction rights.

-The agreement is a accompanied by a negotiable promissory note proving the

debtor’s obligation to pay, the excess income is returned to the defendant.

-No legal costs and expenses.

 It is insufficient to know only the material content of the
right. We also need to know how the right is protected.

★ Ownership rules : to deter potential buyer.

★ Liability rules : potential buyer’s compensation/torts.
In some exceptional cases, trust may be preferred to expectation if the second
measure is difficult to implement and will impose a huge burden.

What does the judiciary want to protect?

-Expectation rate : Benefit from negotiation by being placed in a
good position if the contract was made. In contract law, it is the
most interest given as compensation.
-Trust rate : It is the interest to be repaid due to the loss of trust in
the contract.
-Refund rate : Return of the plaintiff’s benefit to the defendant.

★ Expectation rate and trust rate focus on plaintiff’s positions.

Compensation focuses on the defendant’s positions.
Coase Theorem

-Effectiveness hypothesis : Effective resource allocation will

occur under the conditions transferred according to this
hypothesis.
-Invariance hypothesis : According to this hypothesis, the
same effective allocation will occur under the transferred
conditions, no matter how the legal regulation is.
In a world without transaction costs, it argues that the
choice of legal rules doesn’t affect efficiency because the
parties will always negotiate the path to optimal behavior,
so it shouldn’t affect the taking of measures.
Review / How to create a workable contacts?
Damaged caused by the pledge’s trust in the promise isn’t taken into account
unless it is negotiated.
Court invalidation of a contract:

★ According to the UCC, when a contract is both procedural and substantially

unconscious, the court may render the contract unconscious by law.

When the court finds the contract reasonable:

★ It can refuse to fulfill the contract.

★ Applying the rest without immeasurable substances can be challenging.
★ It may require the elimination of unconscious terms to prevent an
unconscious outcome.
Paraphrasing
★ Solves honest legal disputes.
★ Allows contract changes that reflect more than a bargaining claim.

Implied contract has the same legal effect as an open contract.

Terms:

- It must be a mutual agreement.

- There must be an intention to promise.
Fraud statute
Having a written contract if an agreement enters into statute is a requirement for
the fulfillment of promises in the contract.

The applicant doesn’t deny the existence of the contract. The contract is signed
by the party requesting sanctions.

For the creation of a contract that applies to both parties, there must be a
manifestation of gratuitous consent by both parties.
According to objective theory, whether consent manifests or not is determined by
the actions of the parties, so a party can be connected despite a hidden contrary
intention.
A proposal is a kind of conditional promise that depends on the other party’s
promise of return.
Whether the pledger trusts the promise may be a matter of dispute, which may
require the jury to decide whether there is a genuine wrongful trust.
A reasonable listener standard determines whether someone indicates their
approval.

There would be fewer summary decisions and directed decisions when there was a
confidence requirement.
Advertising and Contract

★ The general rule is that the ad does not create a bid.

-It cannot be converted into a viable offer only if a potential bidder expresses
a willingness to accept the offer through the filling out of an order form,
among other means.
-Ads are not generally prepared as sales offers.
-The ambiguity of language indicates that a legal word was never intended or
thought of.
Mirror Image Rule VS Reconstruction
★ According to the mirror image rule, if the terms of an offer are changed
simultaneously and unilaterally, acceptance will not occur.
★ The introduction of new terms constitutes a counteroffer, and a counteroffer
destroys the original unless otherwise specified by either party.
★ The UCC does not include a fill-in-the-blank provision that provides for
arbitration.
★ Additional terms can be interpreted as offers added to the contract.
★ Additional terms are additional offers that do not become part of the
contract unless the bidder accepts them.
Are we bound by arbitration terms and warranty in online
shopping?

-The license agreement must be read and accepted before purchasing the
product.

-The exception to the requirement for the manifestation of consent in

arbitration agreements does not apply to arbitration provisions. It is
important that the arbitration terms are specific and clear in providing
consent.
Thank you.