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Chapter 2. Offer and Acceptance 287 results (showing 5 best matches)
- Every contract involves at least two contracting parties. In some contracts, however, only one party has made a promise and therefore only this party is subject to a legal obligation. Such a contract is said to be unilateral. In contrast, a contract where both parties have made promises is bilateral. If there are more than two parties, the contract is bilateral if one party is both a promisor and a promisee.
- The situation is more complex when the invitation is prepared by a governmental unit. There is likely to be a statute stating that a contract shall be awarded to the lowest responsible bidder. The bid is the offer and a contract is not formed until the lowest responsible bid is accepted. Even after the tentative acceptance of the bid for a public contract, the law may require certain formalities, such as an integrated written contract, the checking of the creditworthiness and suitability of the bidder, the furnishing of a bond and the like. There may be no contract until these steps have been complied with.
- To satisfy this section the parties must intend to contract. Indefiniteness as to material terms does not prevent this intent from existing. However, “when a dispute over material terms manifests a lack of intention to contract, no contract results.” Despite the liberality of the UCC, a price list is not a contract or even an offer.
- It might seem that there is little practical difference between an offer to a series of unilateral contracts and an offer to one unilateral contract with a number of performances. But it would make a great difference if A wished to revoke the offer prospectively. A could do so if the offer was to a series of unilateral contracts but not where there was only one unilateral contract with a series of performances.
- (3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such cases the terms of the particular contract consist of those terms on which the writings of the parties agree, together with supplementary terms incorporated under any other provisions of this Act.
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Chapter 1. Introduction 121 results (showing 5 best matches)
- Serious criticism has been leveled of late against the adequacy of contract law. The criticism is of two kinds. First, that contract law has not forged adequate tools for coping with contracts of adhesion. This is discussed elsewhere in this book. The thrust of the criticism is that traditional contract doctrine takes as its model the discrete transaction: the contract to sell a horse, a house, a plot of land, or short-term services. In today’s world such transactions continue but are overshadowed by long-term relational contracts: franchises, collective bargains, long-term supply contracts and the like. The need in the future is to recast much of contract doctrine to consider more adequately the needs of on-going relational contracts. In this, he is surely right.
- Every contract involves at least one commitment that has legal consequences. The usual, but not the inevitable, legal consequence is that performance of the commitment may be enforced in court by a money judgment and sometimes by a decree ordering specific performance. The obligation to perform present in every contract is stressed in a widely quoted but somewhat inaccurate, definition: “A contract is a promise, or set of promises, for breach of which the law gives a remedy, or the performance of which the This, like similar definitions, is somewhat misleading. While it is true that a promise, express or implied, is an element in every contract, frequently the promise is coupled with other elements such as physical acts, gap-fillers, recitals of fact, and the immediate transfer of property interests. In ordinary usage the contract is not the promise alone, but the entire complex of these elements. The definition also fails to point out that a contract usually requires the assent of...
- Another common definition of a contract is that it is a legally enforceable agreement. While this definition has the advantage of emphasizing that “agreement” is at the core of the law of contracts, the troublesome fact is that there are certain kinds of contracts that may be formed without an agreement. Also, like other definitions of the term “contract,” it is unenlightening, and of little help in determining whether a given set of words and acts are legally enforceable. In sum, knowledge of much of the law of contracts is a prerequisite to an understanding of what a contract is.
- The contract provisions of Article 2 of the UCC make many changes in traditional contract law with the result that very often there is a different rule for “contracts for sale” than for other contracts such as for labor, services and the sale of land. The UCC does not change all the traditional rules; where it is silent, the traditional rules prevail even as to contracts for sale. there is a marked tendency to employ the UCC by analogy to transactions outside its coverage. In addition, the Restatement (Second) has recast many of the provisions of the original Restatement to harmonize them with the UCC. The foreseeable result is that in future decades the principles underlying the contract provisions of Article 2 will be the law of the land even for contracts not governed by the UCC.
- The distinction between formal and informal contracts is based on the method of the formation of the contract. Under the early common law a promise was not binding unless accompanied by certain formalities. Three kinds of formal contracts are still important: (1) contracts under seal;
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Chapter 5. Informal Contracts Without Consideration or Injurious Reliance 47 results (showing 5 best matches)
- If a party admits in court proceedings making the contract that is unenforceable under the Statute of Frauds, there is a recent trend allowing enforcement. In fact, if the contract is governed by the UCC, a party can be compelled under oath to admit or deny making the contract. If the party admits making the contract, it is enforceable.
- contracted to sell water for forty years to the plaintiff for resale outside town limits. The contract included a schedule of prices and provisions for escalation that limited any rate increase to an amount proportional to the rates charged other customers. The contract further provided that the town would not be required to provide in excess of fifteen million gallons of water per month. Despite this provision, for fifteen years the town had supplied the plaintiff at the contract rate, almost twice as much water as the contract required. Suddenly, the town doubled the price of plaintiff’s water and reduced the rates to most residents of the town. In partial justification for the rate increase, the town argued that it was supplying much more water than the contract required and therefore the contract did not regulate the price that could be charged. The court disagreed. The course of performance had given plaintiff a feeling of security that it had a good supply of water at the
- Not all contracts require consideration. The distinction between formal and informal contracts is introduced in § 1.8. Formal contracts require no consideration. The formal contract under seal survives in some jurisdictions, as do recognizances and other kinds of specialties that are deemed to be formal contracts. In addition, some informal contracts are exempt from the requirement of consideration. For example, promises that are enforceable because they have induced unbargained-for reliance are the subject of the next chapter on promissory estoppel. This chapter is concerned with informal promises enforceable without detrimental reliance or consideration. One group of promises of this kind, promises to perform a duty despite failure of a condition, will be discussed in chapter 11, where the context will clarify the discussion.
- As discussed in Chapter 19, the Statute of Frauds bars the enforcement of certain contracts that do not meet the Statute’s requirement that there be a writing or electronic record evidencing it. If A and B enter into such a contract that is unenforceable because it does not meet the statutory requirement, should a subsequent oral promise based upon the previous unenforceable contract be enforceable? Assuming first that the arrangement within the Statute of Frauds is still executory, it might seem that the case is analogous to voidable contracts and that the subsequent oral promise should be enforceable despite the absence of fresh consideration.
- A written contract can be modified orally, although some jurisdictions require “clear and convincing” evidence of the modification. Apart from statute, the majority common law rule is that “even where the contract specifically states that no non-written modification will be recognized, the parties may yet alter their agreement by parol.” This result stems from the notion that contracting parties cannot today restrict their own power to contract with each other tomorrow.
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Chapter 7. Contracts Under Seal 18 results (showing 5 best matches)
- Centuries before the doctrine of consideration was developed and long before informal contracts were enforced, contracts under seal were enforced. A contract under seal is a formal contract; indeed, the prevalent kind of formal contract from the late middle ages down to recent times, at least in non-commercial transactions. The promise under seal is enforced because of the form of the instrument. The three required formalities are: a sufficient writing, a seal, and delivery. In addition, the promisor and promisee must have legal capacity and the contract must not be void as, for example, because of illegality. Also, if the promisee is to render some performance under the contract, such performance may be required as a condition precedent to enforcement of the promise under the same rules as are applicable to a contract without a seal (an informal contract).
- The rule on discharge or modifications of sealed contracts has changed considerably. At early common law, courts held that the discharge or modification of a sealed contract could be accomplished only by another sealed instrument. Later it was held that a sealed instrument could be discharged or modified by an accord and satisfaction but not by an unperformed executory bilateral contract.
- Thus, for example, the rule of agency law that a principal may sue or be sued on a contract, although the contract by its terms appears to be made with the agent, is inapplicable to sealed instruments. Some courts, however, have circumvented this rule in part by holding that if the contract was such that no seal is required, it will be treated as an informal contract.
- Also, although there was an initial reluctance to permit a suit by a third party beneficiary upon a sealed contract, the prevailing view today is that there is no greater obstacle to such an action than in the case of informal contracts.
- ; Rs. 1st. § 407. See Costigan, Waiver, Alteration or Modification by Parol of Contracts under Seal, 6 Ill.L.Rev. 280 (1911). At early common law many other defenses that could be raised against simple contracts could not be raised against sealed instruments, necessitating the intervention of equity to stay the unconscionable exercise of the promisee’s legal right to enforce the sealed instrument despite the defense of fraud, payment or the like. See
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Chapter 9. Avoidance or Reformation for Misconduct or Mistake 222 results (showing 5 best matches)
- (1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract
- Since the enactment of the UCC, the unconscionability concept has developed along several discernable lines. First, and perhaps most significant, the provision has entered the general law of contracts and has been applied to numerous transactions outside the coverage of Article 2 of the UCC. It has been deemed applicable or, at least, relevant, in cases involving a contract to construct asphalt plants, home improvement contracts, real estate brokerage contracts, a contract opening a checking account, a contract for a motion picture idea,
- to treat contracts of adhesion or standard form contracts differently from other contracts. There is nothing inherently wrong with a contract of adhesion. Most of the transactions of daily life involve such contracts that are drafted by one party and presented on a take it or leave it basis. They simplify standard transactions such as obtaining or using a credit card. There is a body of case law subverting the traditional duty to read concept in adhesion or other standard form contracts, on three different grounds: (1) there was not true assent to a particular term, (2) even if there was assent, the term is to be deleted from the contract because it contravenes public policy,
- When a party show[s] that the contract, which is . . . to be enforced, was . . . an unconscionable one, due to a prodigious amount of bargaining power on behalf of the stronger party, which is used to the stronger party’s advantage and is unknown to the lesser party, the contract provision, or the contract as a whole, if the provision is not separable, should not be enforceable on the grounds that the provision is contrary to public policy. The party seeking to enforce such a contract has the burden of showing that the provisions were explained to the other party and came to his knowledge and there was in fact a real and voluntary meeting of the minds and not merely an objective meeting.
- We have previously seen the general rule that in the absence of misrepresentation one who does not choose to read a contract before signing it is bound by the contract. This rule has been circumvented at times by a finding that there was no mutual assent, most often in contracts of adhesion. See § 9.43 infra.
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Chapter 11. Conditions, Performance and Breach 203 results (showing 5 best matches)
- The doctrine is generally applicable to bilateral contracts for an agreed exchange of performances. One exception is a contract for the sale of goods, discussed below. The doctrine is frequently applied to building contracts where exact performance is seldom achieved, but it is applicable in other contexts, such as a contract to convey real property, and service contracts.
- existing contract.
- of a contract, the event that operates as a condition may have occurred before or at the time of the formation of the contract. For example, this could occur in the case of a marine policy that insures against a loss that may have already occurred at the time of contracting.
- Concurrent conditions principally occur in contracts for the sale of goods and contracts for the conveyance of land, but are not limited to those contracts.
- The doctrine of substantial performance that is almost universally applied does not apply to contracts for the sale of goods. Instead, sales contracts are governed by the perfect tender rule developed with respect to sales contracts in the nineteenth century. Under the rule, the buyer is free to reject the goods unless the tender conforms in every respect to the contract—not only in quantity and quality but also in the details of shipment. In the words of Learned Hand: “There is no room in commercial contracts for the doctrine of substantial performance.”
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Chapter 13. Impracticability and Frustration 137 results (showing 5 best matches)
- Upon the demand of one of the parties, the judge may modify the effects of a contract, or he may set it aside in whole or in part on the basis of unforeseen circumstances which are of such a nature that the co-contracting party, according to criteria of reasonableness and equity, may not expect that the contract be maintained in an unmodified form. The modification or the setting aside of the contract may be given retroactive force.
- UCC § 2–616 also deals with installment contracts. It gives the buyer the option to cancel or modify where the prospective deficiency caused by a material or indefinite delay or an allocation as to any installment substantially impairs the value of the whole contract. If the value of the whole contract is not impaired the buyer would not have that option as to the whole contract but only as the installment or installments involved.
- All contracts involve risks. Some contracts are almost purely aleatory. If one sells shares of stock on the stock exchange that one does not have—the so-called “short sale”—it is a contract of pure risk and there is no circumstance (absent fraud or the like) in which a court should relieve the seller or buyer from a total loss even if unexpected and On the other hand, in the more typical contract involving the sale of goods or services, or the rental of real estate, each party expects to gain from the contract and each party understands that the other party also expects to gain. In such contracts, neither party expects to gain from the other’s loss, although both realize that such an imbalance may occur. It is in these situations that the impracticability doctrine may redress the imbalance.
- Construction contracts with the federal government now routinely include a “changed conditions” clause that provides for an equitable adjustment in price or in time for performance in the event unknown physical conditions occur or are discovered after the contract is entered into. As a result much of the litigation in government contracts cases concerning the issues discussed in this chapter now centers on the interpretation of standard contract provisions.
- The modification or the setting aside of the contract is not pronounced to the extent that the person invoking the circumstances should be accountable for them according to the contract or common opinion.
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Chapter 19. Statute of Frauds 212 results (showing 5 best matches)
- If A contracts to work for B for one year, the work to begin more than one day after making the agreement, the contract is within the one-year section; but if the work is to begin the very next day the contract is not within the Statute. The theory is that the law disregards fractions of a day. If the contract is restated at the beginning of the work and the restatement can be regarded as the making or remaking of the contract, the year starts to run from that time. “Courts have been very liberal in holding that the restatement was itself a contract.”
- Where one or more of the promises in a contract are within the Statute and others are not, the general rule is that no part of the contract is enforceable. Any other approach would be unfair. There is, of course, predictable difficulty in determining whether the proffered testimony relates to a part of the contract or a separate contract. A large number of cases have applied the same rule even though the contract might be considered divisible. But contrary cases hold that if the contract is divisible and the part that is not within the Statute is performed, the corresponding promise may be enforced. Moreover, according to some cases, substantial performance on one side takes the contract outside of the Statute.
- provides: “A contract for the sale of minerals or the like (including oil and gas) or a structure or its materials to be removed from realty is a contract for the sale of goods within this Article if they are to be severed by the seller * * *.” “If the buyer is to sever, such transactions are considered contracts affecting land * * *.”
- If the subject matter of the contract is not the transfer of an interest in realty, it does not come within the Statute, even if the end result would be an interest in land. For example, a contract to build a building or to do work on land is not within the Statute, and the same is true of a contract to lend money to buy land, and of a contract between That the consideration on one side of a contract is a conveyance of an interest in land does not bring the agreement within the Statute. Boundary line and partition contracts are generally held to be within this section of the Statute of Frauds.
- The UCC expressly provides that a contract is enforceable “if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted.”
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Chapter 21. Discharge of Contracts 58 results (showing 5 best matches)
- A similar problem arises where a party cancels the contract because of a material breach. The UCC provides that “Unless the contrary intention clearly appears, expressions of ‘cancellation’ or ‘rescission’ of the contract or the like shall not be construed as a renunciation or discharge of any claim in damages for an antecedent breach.” The Code language and comment make it clear that this provision applies after a breach and is designed to avoid an involuntary loss of a remedy for breach by the use of language by the aggrieved party to the effect that the contract is called off. The Code primarily addresses itself to a number of unsound decisions that have held that, when a contract is canceled for breach, it is logically impossible to permit an action on the contract since the contract is nonexistent; therefore, only quasi-contractual relief is available. ...in many different senses, for example, termination of a contract by virtue of an option to terminate in the agreement...contract
- The word “novation” is used in a variety of senses. Courts frequently use it as synonymous with “substituted contract.” and both contracts’ restatements, however, restrict its use to describe a substituted contract involving at least one obligor or obligee who was not a party to the original contract. A contract is a novation in this sense if it does three things: (a) discharges a duty immediately, (b) creates a new duty (or a good faith claim), and (c) includes a new obligor or obligee. executory contract. Some third party beneficiary contracts are novations, but are not usually so labeled. Indeed, the utility of the classification of novation is doubtful. Its legal effect is that of a substituted contract. The development of a separate category under the rubric “novation” is doubtless traceable to problems of consideration formerly thought to be present in such contracts because of the former common law rule that consideration must be supplied by the promisee.
- Something akin to rescission also occurs where the parties enter into a new contract which is substituted for the original contract. The old agreement is discharged but the parties are still bound contractually. At times new terms are added to an existing contract. It is obvious that the lines between three situations are indistinct:
- Thus, for example, where an obligation arising under a contract is reduced to judgment, the only remaining obligation is the judgment. Also, where the obligation created by an informal contract is superseded by a sealed instrument or other specialty, the informal contract is discharged by merger. The primary effect of such a discharge of the earlier obligation was an almost total exclusion of parol evidence of the prior contract in an attempt to vary or contradict the higher obligation, or indeed even to explain it. The judgment or specialty was itself the obligation and not merely evidence of it. This early rule of integration preceded the parol evidence rule as applied to informal integrations. Today, the merger of an informal contract into a specialty raises basically ...of an informal contract into an integration; that is, the extent to which the prior expressions of agreement are admissible into evidence. Thus, the existence of a separate heading of “discharge by merger” in...
- Sometimes a contract provides that it cannot be rescinded except in a writing signed by the contracting parties. But are such clauses effective? As a common law proposition, such a provision is ineffective as the parties cannot restrain their future ability to contract with each other.
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Chapter 4. Consideration 130 results (showing 5 best matches)
- As to the first counter-argument, the common law generally regards consideration as necessary to the existence of a contract. Does it beg the question to state that the presence of an obligation of good faith in every contract provides the consideration that transforms a mere agreement into a contract? One answer is that it is no more question-begging than the implication of other terms that have been employed to support the existence of a contract. Consider the implication of obligations of best efforts, reasonable efforts, or good faith to support a promise that is alleged to be illusory. Support for the proposition that the obligation of good faith implied in every contract, makes the agreement binding, is also found in the myriad cases where a party has conditioned its performance on personal satisfaction. ...the common-law tradition of contract law. If reasoning from these analogous cases does not give satisfaction, an argument can be made and justified that the... ...contract...
- contract, the buyer expressly agrees to buy all of the buyer’s requirements of a stated good from the seller who agrees to sell that amount to the buyer. In a typical contract, the seller agrees to sell all of its output of a certain item to the buyer and the buyer agrees to buy that output from the seller. The quantity term is measured by the requirements of the buyer or by the output of the seller. If the buyer agrees to buy all of its requirements up to a specified amount from the seller, the contract is deemed by some courts to be a requirements contract, Because the rules governing output and requirements contracts are basically the same, as a matter of convenience emphasis will be on requirements contracts. The normal method of enforcement is an injunction against dealing with someone else.
- Implicit modifications are common in construction contracts. If the parties fail to follow agreed-upon change order processes and a materially different project ensues, the contract is deemed to have been abandoned and the contractor’s action is for quantum meruit. Sometimes difficult to distinguish is the “cardinal change” doctrine where major changes are demanded and performed; for these cardinal changes the contractor is entitled to the contract price plus compensation for the reasonable value of the changes.
- However, plaintiff did forbear for six months and then brought action not on the debt but on defendant’s promise to pay the debt. The court found for plaintiff, despite the voidness of the bilateral contract, stating as follows: “If a contract, although not originally binding for want of mutuality, is nevertheless executed by the party not originally bound, so that the party asserting the invalidity of the contract has actually received the benefit contracted for, the latter will be estopped from refusing performance on his part on the ground that the contract was not originally binding on the other, who has performed.”
- (1) All of the requisites of the law of offer and acceptance must be fulfilled including the requirement that the promise requested must have been given. Otherwise there would be no bilateral agreement rather than a void bilateral contract. (2) The act performed by the party seeking to enforce the contract must be detrimental. Otherwise, there would be no consideration to support the unilateral contract being forged.
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Chapter 14. Damages 181 results (showing 5 best matches)
- There are many rules of damages for particular kinds of contracts, such as contracts for the sale of goods, construction contracts, employment contracts, Others look at this result and summarize it as the unpaid contract price and other losses minus the costs or other losses avoided.
- Not all contracting parties contemplate a direct and identifiable profit from the contract. A manufacturer may contract to have a product shipped to a convention for display in the hopes of attracting interest in its product, rather than immediate sales. If the shipper is aware of the manufacturer’s purpose, it can foresee that in reliance upon the contract, the manufacturer will rent exhibition space and incur other expenses. In the event of breach such reliance expenditures are recoverable.
- The Restatement (Second) suggests that reliance recovery is limited to the contract price, apparently on the theory that, if reliance expenditures exceed the contract price, full performance would have resulted in a losing contract.
- The cases are divided on the subject of the recovery of wasted expenditures that were incurred prior to entry into the contract. To the extent that it was foreseeable that these losses would be incurred, recovery should be allowed. Although these expenditures would have been incurred even if the contract had not been entered into, it is not at all clear that they would have been wasted if the contract had not been made. Such recovery would be a surrogate for opportunities forgone in reliance on the contract. expectation measure. Assume zero profits and apply a standard expectation measure of recovery. This measure would include pre-contract expenses and a share of overhead.
- The traditional measure of general damages for a total breach of contract by the seller is recovery of “so much of the price as has been paid” plus the difference between the market price of the goods and the contract price. The UCC continues this rule but has added an alternative measure which will sometimes produce a different result. The buyer may choose to cover; that is, make a good faith purchase or contract to purchase substitute goods without unreasonable delay. The buyer may then recover the difference between the cost of cover and the contract price.
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Chapter 12. Anticipatory Breach and Prospective Non-Performance 63 results (showing 5 best matches)
- death or illness of a person whose performance is essential under the contract, encumbrance or lack of title in a contract vendor at the time of the making of the contract, or a sale of the property to another subsequent to the making of the contract, and defective performances rendered under other contracts between the parties or even under a contract with third parties.
- Some relevant cases involve contracts for the sale of realty where the vendor did not have title to the property at the time the contract of sale was entered into—a serious prospective inability to perform. The general rule is that the vendee may invoke the doctrine of prospective inability (change position, etc.) unless the vendor has the right to acquire title or has a justifiable expectation of becoming owner in time to perform under the terms of the contract or the vendee knew of the lack of title when the contract was signed.
- Leading articles are Ballantine, Anticipatory Breach and the Enforcement of Contractual Duties, 22 Mich.L.Rev. 329 (1924); Limburg, Anticipatory Repudiation of Contracts, 10 Cornell L.Rev. 135 (1925); Rosett, Partial, Qualified and Equivocal Repudiation of Contract, 81 Colum.L.Rev. 93 (1981); Rowley, A Brief History of Anticipatory Breach in American Contract Law, 69 U.Cincinnati L.Rev. 565 (2001); Rowley, Anticipatory Repudiation of Letters of Credit, 56 SMU L.Rev. 2235 (2003); Vold, The Tort Aspect of Anticipatory Repudiation of Contracts, 41 Harv.L.Rev. 340 (1928); Vold, Withdrawal of Repudiation after Anticipatory Breach of Contract, 5 Tex.L.Rev. 9 (1926); Wardrop, Prospective Inability in the Law of Contracts, 20 Minn.L.Rev. 380 (1936).
- The UCC imposes an obligation on the other party to respond to a demand for assurances, provided the demanding party has reasonable grounds for insecurity. Reasonable grounds for insecurity exist when the apparent willingness or ability of a party to perform materially declines between the time of contracting and the time for performance. Grounds for insecurity may exist if a contracting party learns of matters not known at the time of contracting and as to which the risk was not assumed. the UCC the insecurity may be based upon defaults under other contracts between the parties
- Is it possible that a doctrine which in a few generations swept practically the entire common law world is so illogical as to violate the “nature of things?” On the contrary, the doctrine does not offend logic and is supported by practical wisdom. As far as logic goes, a contract is usually formed by promises, but the obligation of a contract is the sum of duties thrust by law on the promisor or promisors. There is no lack of logic in the law’s imposition of a duty not to repudiate, as, for example, it has imposed constructive conditions and duties of cooperation on the contracting parties. This duty not to repudiate imposed by law may be breached although no express promise has been breached. or in terms that “the promisee has an inchoate right to performance of the bargain . . . he has a right to have the contract kept open as a subsisting and effective contract,”
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Chapter 16. Specific Performance and Injunctions 89 results (showing 5 best matches)
- Absent an agreement to the contrary, a contract to convey real property contains an implied term that title be “marketable,” that is, title must be good. When the vendor’s title is discovered to be encumbered, and thus not “marketable,” the vendee may nonetheless elect to enforce the contract. The court will decree specific performance with an abatement in price. Although it has been charged that such a decree involves the remaking of the contract, in fact the court is merely tailoring the remedy for breach of contract to fit the situation by enforcing the contract and offsetting damages from the purchase price. Frequently, however, the court will refuse an abatement where the vendee knew of the defect at the time of contracting (on a theory of assumption of the risk or estoppel) or where the nature of the defect is such that only a radically different kind of estate can be conveyed from that contracted for.
- Contracts for the sale of unique personalty other than goods are also specifically enforceable as the purchaser cannot obtain a substitute performance on the market. Consequently, contracts for the transfer of patents, Contracts for the sale of a business are also often specifically enforced as each business can be deemed unique.
- Courts have been reluctant to enforce even non-personal services contracts on grounds of difficulty of supervision. For example, normally courts have not granted specific performance of construction contracts. Plaintiff’s damages would have been entirely speculative and the land site was unique in the ordinary, as well as the legal, sense of the word. In the ordinary building or repair contract, however, where construction is to be on plaintiff’s land, a substitute contractor can be called in and damages ascertained with relative certainty; consequently, specific performance normally will be denied. The same considerations lead to specific performance where consequential damages exist and are speculative or barred by the terms of the contract. No matter what the nature of the construction contract, however, arbitration awards of specific performance will be enforced.
- In many cases, courts have refused to grant specific performance on grounds that supervision of performance would involve an undue investment of judicial time and effort. This has particularly been true in cases seeking specific performance of construction contracts, as well as contracts requiring continuing services of various kinds, and contracts requiring long term delivery of goods. This last category has been overturned by the UCC, Indeed, the willingness of courts of equity in recent decades to take on supervision of complex school desegregation and legislative reapportionment plans, would indicate that supervision of contract performance is a burden that courts can deal with.
- Courts have applied this factor to deny relief in cases where railroads have contracted to maintain grade crossings or stations at places inconvenient to the public and to grant relief, despite the difficulty of supervision, of a contract by a railroad to elevate its tracks. Specific performance of a contract to sell land has also been denied because of the public interest in the esthetic An oil supplier was enjoined from breaching its contract to supply a public power company with fuel, despite the availability of cover at a substantially higher price, because of the adverse effect any power interruption would have on the public. Specific performance of a contract to deliver ball bearings was decreed where the withholding of delivery would have an adverse effect on the Chinese public and China’s economy.
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Chapter 18. Assignment and Delegation 80 results (showing 5 best matches)
- Lawyers sometimes confuse the concepts of assignment and third party beneficiary. Although both involve rights of a person who was not a party to the contract, the concepts differ as to the origin of the third party’s rights. The rights of a third party beneficiary are created by the contract of the two parties to the contract. The rights of an assignee, in contrast, only arise when a party who has rights under a contract transfers to an assignee the rights that had previously been created.
- An option contract gives the optionee the option of accepting or rejecting the terms of the underlying offer. Whether the optionee may assign the rights in the underlying contract to a third party depends on a number of factors including whether the underlying contract is unilateral or bilateral. Suppose A offers to sell property to B in exchange for B’s promise to pay $100,000. A asks B for $1,000 to keep the offer open for 10 days, which B pays, creating an option contract. The offer in the underlying contract is an offer looking to a bilateral contract and can be accepted only by B’s promise. If B does not make the promise, there is no possibility of the underlying contract being effectively assigned. A is entitled to B’s promise because A relied on B’s credit.
- Sometimes a contract contains a provision prohibiting assignment. A minority of cases have held that a contractual provision prohibiting the assignment of rights created by the contract is an unlawful restraint on alienation. The great majority of cases, however, have reached a contrary conclusion refusing to interfere with the parties’ freedom of contract. Whatever the general rule, an anti-assignment clause does not prohibit the assignment of a cause of action for breach.
- Article 2 of the UCC also contains a provision relating to interpretation of anti-assignment clauses. It provides that a clause in a sales contract prohibiting assignment of “the contract” should be, unless the circumstances indicate the contrary, construed as barring only the delegation of duties. but anti-assignment clauses in contracts between patients and their H.M.O.’s are generally upheld.
- A significant change from the common law is a provision that despite notification of the assignment to the obligor, the original contracting parties may agree to modify or substitute the contract in good faith and in accordance with reasonable commercial standards, provided the assigned contract right has not been earned by full performance. The assignee is bound by the modification but acquires rights under the modified or substituted contract.
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Chapter 22. Illegal Bargains 60 results (showing 5 best matches)
- There are other examples of severance outside of the standardized situations. In each of these cases, the primary purpose of the contract was salvaged. One, it has been held that if a contract contains an illegal provision whereby a party surrenders the right to appeal, the balance of the contract is enforceable. Two, provisions in a contract unlawfully circumventing the powers of corporate directors have been disregarded where of the contract would not be defeated. Five, a contract containing an illegal price term can be salvaged by excising the price term and supplying “market price” as an implied term. Six, the US Supreme Court’s ruling is distinctly different from the rest of this catalog. It continues to favor arbitration by holding that an arbitration clause cannot be severed from a contract unless the clause itself is attacked as void or voidable; an attack on the contract won’t do.
- If A and B enter into a legal contract that subsequently becomes illegal, the issue is impossibility of performance. A different problem is presented if the contract is illegal when formed but subsequently contracts of that type become legal as a result of a change in fact or a change in law. The general rule is that a change of law does not validate a contract that was originally illegal and unenforceable. However, the contract may be ratified.
- the plaintiff’s additional argument was that the illegality was too remote. Plaintiff contended that, although the agreement between the plaintiff and the purchasing agent was illegal, the contract for the sale of hosiery was perfectly legal. The court disagreed, pointing out that the illegal bribe was an inducing cause of the hosiery contract and therefore tainted the contract.
- Earlier we looked at the idea of divisibility pursuant to which a party in material breach of a contract could nonetheless recover for performance of divisible portions of the contract. A similar, but not identical, idea permits recovery where part of the contract is illegal. For example, plaintiff, an unlicensed plumber, entered into a contract with defendant to do certain plumbing work for an agreed sum. Plaintiff performed, but because of the lack of a license could not recover the price. The court, however, permitted recovery for the materials furnished but not for labor performed. severed the furnishing of materials from the services rendered although the contract was entire and not divisible in the sense that term is used in § 11.23 supra. This kind of decision tends to show that divisibility is not determined by fixed rules, but by the judicial instinct for justice.
- As one court stated, “public policy can be enunciated by the Constitution, the legislature or the courts at any time and whether there is a prior expression or not the courts can refuse to enforce any contract which they deem to be contrary to the best interests of citizens as a matter of public policy.” Public policy has been the announced rationale for striking down contracts or contract clauses on grounds of immorality, A contract guarantying performance of an illegal act is itself illegal.
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Chapter 15. Restitution as a Remedy for Breach 54 results (showing 5 best matches)
- Quasi-contractual recovery is the principal type of restitutionary recovery at law. In the past, restitutionary recovery of a money judgment for breach of contract has been viewed as a type of quasi-contractual recovery. While such recovery for breach is now distinct from quasi-contract, it shares many of its principles. Throughout this volume reference has been made to the availability in particular circumstances of a quasi-contractual or other restitutionary recovery. The availability of such remedies has been discussed or alluded to in the context of performance pursuant to agreements that are too indefinite to constitute contracts, contracts that are avoided because of duress, undue influence, misrepresentation or mistake, contracts that are unenforceable because of the Statute contracts that are discharged because of impracticability or frustration,
- In the event of total breach, the aggrieved party may cancel the contract and pursue all available remedies, one of which is restitution. An old view of restitution has left its mark on current law. In former times, a suit for damages was deemed to be an action to enforce the contract. A suit for restitution was deemed to be an election to rescind the contract and pursue a quasi-contractual remedy not based on the contract. It has long been recognized that the right to damages or restitution are both remedial rights based on the contract. and the aggrieved party has made two elections. First, the non-breaching party must elect to cancel the contract. Traditionally, notice of cancellation has been called “rescission.” The use of the term “rescission” to describe the notice of cancellation of the contract should be avoided. The legal relations resulting from a mutual rescission and from a decision by an aggrieved party to cancel the contract are quite distinct, but have often been...
- If a party performs a divisible portion of the contract that party cannot obtain restitution for that portion, but only the apportioned price. In the case of a divisible contract the party receiving goods
- Rs. 1st Contracts § 354(a) ills. 6, 7. The Rs.2d Contracts defers to UCC Art. 9.
- Rs. 2d Contracts § 372 cmt a & ill. 4; Rs. 1st Contracts § 354(a); UCC § 2–702(3); Kull, Defenses to Restitution: The Bona Fide Creditor, 81Boston U.L.Rev. 919 (2001).
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Chapter 17. Third Party Beneficiaries 58 results (showing 5 best matches)
- Can a third party beneficiary disclaim the rights created by the contract? The beneficiary may within a reasonable time after learning of the contract “render any duty to himself [or herself] inoperative from the beginning by disclaimer.” If the intended beneficiary rejects the contract, it is as if no contract for its benefit had been made.
- Is an inhabitant of a governmental unit a third party beneficiary of a contract made by the unit? In a sense every contract made by a government is made for the benefit of its inhabitants. If a city contracts to have a police station, fire house, or park built, it does so to enhance the general welfare and, thus, to benefit the public. The question is whether there was an intent to benefit the inhabitants in the sense that individuals have the right to enforce the contract. In such an action, contrary to a taxpayer’s (qui tam) action, the recovery goes to the individual rather than to the public treasury. Although the courts often purport to employ the same rules as are applied to private contracts, they are reluctant to find that such rights exist.
- Another view is that the rights of a creditor beneficiary vest on learning of the initial contract and assenting to it. The second view seems preferable in that once the creditor beneficiary has assented to the contract there is likely to be reliance in subtle ways, not easily provable, on the security of the contract.
- If A is an intended beneficiary of a contract between B (promisee) and C (promisor), can B and C by an agreement subsequent to the contract destroy or curtail A’s rights? This cannot be done if the rights of the beneficiary have vested.
- The rights of the named irrevocable beneficiary in a life insurance policy may also be defeated by a provision in the contract that allows the insured promisee to borrow against it. The beneficiary may not complain if the promisee reduces or destroys the beneficiary’s rights by borrowing pursuant to the terms of the contract.
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Chapter 3. Parol Evidence and Interpretation 113 results (showing 5 best matches)
- There is one commonality among the divergent views. Basically every view starts by asking the same two questions. First: is the contract integrated? Second: if so, is the integration total or partial? These two questions are asked to ascertain the of the contract. These questions are discussed in sections 3.2 to 3.8. Other questions are then asked as to how the of the terms of the contract are to be ascertained. This second group of questions involve the of one or more terms of the contract. Most of the second half of this chapter explores the various ways meaning is determined.
- The narrower view makes a distinction between promises that “are inherently and substantially collateral to the main purpose of the contract” and those “which directly relate to the main object.” This distinction is unworkable. Williston therefore suggested a new “reasonable person” test, discussed below. Since that time the “collateral contract” rule has been declining in popularity, although at times Williston’s rules and the “collateral contract rule” are employed in the same case. Despite its decline, and despite its amorphous nature, the “collateral contract” approach is still alive.
- Frequently, the condition that is held to be a condition precedent to the formation of a contract operates logically as a condition precedent to the performance of the contract. A good illustration is the seminal case of Pym v. Campbell. In Pym, the parties entered into an agreement to buy and sell a certain patent. The sale, however, was orally conditioned upon the approval of the patent by the purchaser’s engineer. The court held that the oral condition was admissible because until the condition occurred no binding contract existed. Logically, it could be argued that there was a binding contract when the parties mutually agreed and thus the condition was actually a condition precedent to the performance of the contract. The argument continues that the purchaser has a duty to act in good faith by using best efforts in seeking the approval of the third party. If this is so, the case should have been decided under the rules stated in section 3.4 relating to the admissibility of...
- Thus, in one employment case the parties had different reasonable meanings of the term, “gross receipts.” There was no contract and compensation was based on reasonable value. When the parties again reached agreement and used the employer’s same form contract, there was a contract based on the employer’s understanding because this time the employee knew what the employer’s intention was.
- Once a trade usage that binds the parties is proved, the trade usage may be used on the issue of meaning and also to add a term to the agreement. For example, the Model Rules of Professional Conduct can supply implied terms to the attorney-client contract, operating much like a statement of professional usages. However, some common law cases continue to exclude evidence of usage, course of dealing and course of performance unless the written contract is ambiguous or contains a gap. These cases are unwise. The principles of contract law do not depend “solely on what occurred at the moment in time when a contract was formed, but instead turn on the moving stream of events that precedes, follows, or constitutes the formation of a contract.” A course of dealing may flesh out an incomplete oral or written contract.
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Chapter 8. Capacity of Parties 82 results (showing 5 best matches)
- A good many cases speak in terms of a firm rule that distinguishes between executory and executed contracts. According to these cases, executed contracts are automatically ratified and thus binding if not disaffirmed within a reasonable time after majority, but executory contracts are not binding unless ratified by words or conduct after majority. The rule is a carryover from the older view than an infant’s executory contract is void rather than voidable. It is apparent, however, that this “rule” as to executory contracts is not applied when the infant’s failure to disaffirm within a reasonable time after attaining majority works injustice on the other party.
- The other party to a contract cannot sue the infant for tort if the tort is in essence a breach of contract. While it is possible in some jurisdictions to frame an action for negligence in respect to a bailment in terms of tort or in terms of breach of contract, It is believed that to allow such an action would in effect be enforcing the contract in circumvention of the protective contract rule of infancy. The same analysis is made as to breach of warranty. Although such a breach may often give rise to an action in tort, because it stems from a contract, it is not maintainable against an infant.
- An infant is liable in quasi-contract for necessaries furnished the infant but the infant may disaffirm an executory contract for necessaries. As a consequence of the quasi-contractual nature of the action, the infant is not liable for the contract price, but for the reasonable value of the necessaries furnished.
- Under the majority view, a kind of compromise has evolved. Two kinds of contracts are automatically voidable: executory contracts, and contracts based upon grossly inadequate consideration. In addition, a second class of contracts is voidable if the incompetent can place the other party in the status quo ante. voidable contracts consists of executed contracts where the other party took no advantage of the incompetent and had no reason to know of the infirmity. If the incompetency would be obvious to a reasonable person, there is no obligation upon the incompetent to make restitution if the consideration has been consumed or dissipated.
- In a significant case, the U.S. appointed the defendant steamship company as its agent for the management of a government owned merchant ship. As agent, the company contracted with its stevedoring division for the loading and unloading of the ship. Despite the company’s subsequent contention that it could not contract with itself, the court ruled that the contract was binding on the defendant upon ratification of the contract by the U.S. A contrary result based upon the supposed incapacity of a company to contract with itself would clearly have sacrificed a sound result from an overgeneralized rule. The case is in tune with the same realistic approach which permits one department of the executive branch of government to sue another department of the executive branch.
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Index 489 results (showing 5 best matches)
Table of Cases 12 results (showing 5 best matches)
Table of Contents 73 results (showing 5 best matches)
Chapter 6. Promissory Estoppel as a Substitute for Consideration and Much Else 46 results (showing 5 best matches)
- In the cases discussed above the parties intended to contract, had reached agreement and believed that they had entered into a contract. Yet, there was a legal defect in formation. Promises made in preliminary negotiations are different. The parties were still negotiating, and had not as yet reached agreement and did not expect to be bound until some later time.
- The unwritten premise of the First Restatement is that if the elements of promissory estoppel are present a contract is formed and therefore ordinary remedies for breach of contract would be available. As Williston explained, either a contract was
- Where a contractor accepts a bid before it is awarded the general contract, the contractor may be held to a bilateral contract, although it is possible to find an implied condition that the general contract be awarded to the general contractor.
- Presumably promissory estoppel could be used in cases involving voidable contracts but the traditional rules employed in the area of voidable contracts take into account the element of reliance. For example, where auditors were promised 25% of any recovery of fraudulent claims they were instrumental in discovering, they found out that a health care provider had an anti-audit provision in their contract with the promisor and that the promisor did not pursue claims that violated the anti-audit provision. They pleaded a good claim in promissory estoppel.
- (could have been a routine contracts case); (plea of promissory estoppel can coexist with contract claim so long as contract is contested).
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Preface to the Seventh Edition 1 result
- The six prior editions of this text have met with success beyond our expectations. We measure success by the many graduates of diverse law schools from the most prestigious to the least renowned who have greeted us with thanks for having helped them learn contract law through the medium of this text. We also measure success by the many reported decisions and scholarly works that have cited this text as support for their conclusions about contract law. The aspiration of the present author is that this edition will meet with comparable success.
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Chapter 20. Joint and Several Contracts 7 results (showing 5 best matches)
- Inconsistent with the general rule that one joint obligee may discharge a joint obligation, is the holding that a repudiation by one of the parties who jointly held rights and obligations under a bilateral contract does not create an anticipatory breach,
- Statutes are collected in the Introductory Note to § 288 of the Rs. 2d of Contracts.
- Simpson, Contracts § 139 (2d ed.1965).
- Thus, if A promised to pay B and C $1,000 for work to be done by B and C, the question of whether B and C are joint promisees is resolved by interpreting the wording of the contract in the light of the nature of the relationship between B and C. If they are partners, they have a community of interest in the profits and losses of the transaction and as a matter of law their rights are joint or joint and several.
- Similarly, where a coal merchant in a single document promised to take all of its requirements from three coal companies in equal shares, it was held that each of the coal companies was a several obligee, there being no connection between them other than the contract itself.
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Summary of Contents 11 results (showing 5 best matches)
Center Title 1 result
Title Page 1 result
- Publication Date: August 21st, 2014
- ISBN: 9780314287700
- Subject: Contracts
- Series: Hornbooks
- Type: Hornbook Treatises
- Description: The author provides a detailed treatment of the basic rules, principles, and issues in contracts. Topics covered include offer and acceptance, parol evidence and interpretation, consideration, promissory estoppel, contracts under seal, capacity of parties, conditions, performance, and breach. The author also discusses damages, avoidance and reformation, third-party beneficiaries, assignments, and the statute of frauds. The discharge of contracts and illegal bargains are also the subject of separate chapters.