Contracts in a Nutshell
Authors:
Rohwer, Claude D. / Skrocki, Anthony M. / Malloy, Michael P.
Edition:
8th
Copyright Date:
2017
24 chapters
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Chapter 1 Introduction 58 results (showing 5 best matches)
- The primary focus of this Nutshell will be just what the title states, “Contracts.” However, these materials will cover not only the law of Contracts, but also some of the law applicable to the sale of goods (regardless of whether there was a contract formed). Materials relating to the law of restitution are included in Chapter 10.
- “Quasi-contract” is an accepted term today and no particular harm will result from its usage, so long as one remembers that the liability is in restitution (with the purpose being the avoidance of unjust contract. By contrast, the term “implied-in-law contract” almost inevitably leads to confusion. True contracts can be either express or implied. Thus, one form of true contract is properly called an “implied contract” meaning a contract where a person’s promise is implied from that person’s conduct (“implied-in-fact”). If one uses the term “implied-in-law contracts” to describe quasi-contracts, it is only a matter of time before one confuses “implied-in-fact” and “implied-in-law” and loses track of the basic subject being discussed. Use of the term “implied-in-law contracts” should be avoided.
- Scope of This Nutshell—Contract Law and Sales Law
- A contract in which an artist is to paint a portrait of the family matriarch is probably a service contract. The artist is to deliver the completed painting which could be viewed as specially produced goods, however, the dominant nature of the contract is probably the service of the artist in painting the picture. (However, buying an already completed painting displayed at the same artist’s studio is a sale of goods.)
- Under the law of Restitution, courts impose an obligation to pay for benefits conferred despite the absence of a promise. This non-consensual obligation imposed by law, is sometimes called an “implied-in-law contract” but it is not a contract. It has nothing to do with any promise, either express or implied, and therefore there is no need for there to be a promisor or promisee. It is premised upon the concept of avoiding unjust enrichment, and the authors would not be mentioning this term until we reach the topic on restitution in Chapter 10 were it not for the fact that the concept of quasi-contract tends to appear early in some contract discussions. In some cases when the court cannot find a true contract based upon a manifested promise, it will allow relief under a restitutionary theory to prevent unjust enrichment and may refer to the situation as being one of “quasi-contract”.
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Copyright Page 5 results
- Nutshell Series, In a Nutshell
- The publisher is not engaged in rendering legal or other professional advice, and this publication is not a substitute for the advice of an attorney. If you require legal or other expert advice, you should seek the services of a competent attorney or other professional.
- Printed in the United States of America
- © West, a Thomson business, 2000, 2006
- © 2017 LEG, Inc. d/b/a West Academic
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Preface 11 results (showing 5 best matches)
- This Nutshell is intended to assist those who are attempting to learn and understand the basic principles of the law of Contracts and of Sales of Goods in the United States. The materials as presented here are not intended to be the primary source of acquisition of the knowledge and understanding of the substantive law and underlying policies. The reader should appreciate that a work of this type is intended only as an additional supplemental resource to aid in the organization and understanding of the substantive law. As such, it is quite adaptable to a variety of learning strategies. It could be used to acquire a preliminary overview of a specific area, or it could be used after one believes he or she has already acquired an understanding of the basics. It could also be used simultaneously and continually with other sources during the entire learning process. Whichever choice is made as to its use, we would emphasize that ultimately there is no substitute for confronting directly...
- The sequence of materials as presented here may differ from the order or approach that the reader is utilizing for the study of the law of Contracts. For example, some Contracts courses may start with “Consideration”, and others may start with “Remedies”. Recognizing the diversity in approach, most chapters of this Nutshell have been written to be comprehensible regardless of the order of study. Therefore, the reader should be able to focus upon individual chapters without immediate concern about continuity.
- As a result, the UCC may be a little less “uniform” as enacted by the states. The text of this Nutshell will rely on the Official Text of the UCC and will use its citation form. When the text of this Nutshell intends to refer to the 2001 Revisions of Article 1, there will be an “R” before the section number. Thus it would be “section R1–301(c)” in the text that follows.
- The last chapter consists of a short outline entitled “A Framework for Review”. This is meant to be used the study of the entire Contracts course is completed. It may assist in developing a manageable approach to the application of the extensive materials covered in the course. A student reading this chapter would be well-advised to self-test his or her own understanding of the Contracts course by evaluating why this “Framework” was put together as it was and whether the student could make improvements in it.
- The authors, along with thousands of law students, attorneys and judges, are indebted to the late Dean Gordon Duane Schaber (1927–1997), one of the authors of the earlier editions of this Nutshell. Gordon D. Schaber served the legal profession in many roles, including that of Lawyer, Professor, Dean, Community Leader, Judge, Adviser, Scholar and most important to us, a friend. His contributions to legal education at the national level cannot be measured.
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Chapter 5 Defenses 179 results (showing 5 best matches)
- As used in the law of contracts, the term “mistake” refers to a belief that is not in accord with the facts. It must relate to a present factual matter existing at the time the contract is made. Proof of the existence of a mistake does not, in itself, afford a basis for relief from a contract or revision of the contract. It is simply the first step in establishing a right to avoid or reform a contract. As with most defenses, the law of mistake is a concept derived from courts of equity and all considerations of fairness and justice are properly weighed.
- In determining when a violation of public policy will prevent enforcement of a contract, the courts must consider not just the gravity of the misconduct but also the closeness of the connection between the misconduct and the contract performances. There may be a direct connection if the contract performance itself is violative of public policy. In another case the contract may involve no objectionable performance but the agreement may have been obtained by improper methods such as by bribing an agent. A more remote connection exists if one party in fact performs an illegal act in the course of performing an otherwise legal contract.
- If contract performances are severable and severance of a portion will cure the offense against public policy, the remaining portion of the contract may be enforced. (Regarding severability, see § 8.7.) A court may rewrite a contract to remove terms that violate public policy and enforce the rest. This is clearly a desirable result in cases where the party seeking to enforce the contract is not the source of the offending terms. Assume that an employment contract contains a covenant not to compete that involves an excessively large geographical area or is to endure for an excessively long time, and thus constitutes an unreasonable restraint of trade and is unenforceable. A court should permit the employee to enforce the balance of the employment contract, assuming that the employee is not guilty of wrongdoing. A more difficult question is presented if the employer seeks to enforce that part of the covenant which, standing alone, does not contravene public policy. For example, if a...an
- Although it is said that infants are under a legal disability in regard to forming a contract, that is not technically accurate because an infant does have the power to form a contract and the contract will be enforceable by the infant against the other party. However, the contract may be avoided at the option of the infant. The infant therefore is in a favored position enjoying protection against improvident commitments but having the right to enforce the contract if the infant so desires.
- Party A cannot avoid a contract on the basis of misrepresentation unless
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Chapter 8 Performance 183 results (showing 5 best matches)
- Contract law in the United States does not impose a general requirement of good faith in the negotiation stage. The contract is what gives rise to the obligation of good faith, and that obligation is applicable to matters relating to the “performance or enforcement” of the contract. An existing contract may impose a requirement of good faith in the negotiation of renewals or the negotiation of contracts concerning related matters.
- A forfeiture involves a loss in the nature of a punishment. Punishment is appropriate in criminal law and in some issues involving tort law, but the purpose of contract law is to protect reasonable expectations, not to punish. Since punishment is an inappropriate outcome in a contract case, forfeitures are to be avoided when possible.
- At common law, contracts for the sale of goods were interpreted to require sellers to deliver the precise goods at the stated time and in the correct quantity. Historically, contracts for the sale of goods were generally single transactions in which precise performance by the seller was expected. The UCC has continued this interpretation of contracts for goods and any departure from the contract specifications is therefore a breach entitling the buyer to any money damages that can be proven. However, the remedy that is far more important in many circumstances is the right to reject goods that do not conform or goods that are not tendered in conformance with contract requirements such as a late delivery. As a practical matter, if the buyer must accept goods that are not properly tendered, the right to claim some damages is often not a helpful remedy. The right to reject the goods is usually a much more helpful remedy.
- Courts are prone to hold that an express condition must fully and literally occur before the duty that is subject to this condition will arise. This can cause one party to incur a forfeiture if the condition is substantially fulfilled but has failed in some minor detail. To avoid this result, the court may refuse to find that an event is an express condition. Instead, the court can find it simply to be a “best efforts” provision or an interpretive provision or some other contract detail, in which case substantial fulfillment of the term is sufficient and minor discrepancies will not result in a forfeiture or loss of contract benefits. It is a fair conclusion that courts are not ordinarily motivated to find that a provision open to competing interpretations is a condition in the contract. This point must be kept in mind when drafting a contract. If you want some event to act as an express condition to your client’s duty, you must ...language of express condition. If there is a way to...
- Review the discussion of hypothetical construction contracts in section 8.3. When failure of an express condition leaves one party with a substantial loss due to inability to obtain the anticipated contract benefits, there is a motive to excuse that condition and give the party the benefits of the contract. The contrary position is based on the simple fact that we espouse principles of freedom of contract, and we are committed to respect the intention of the parties, which in this case includes enforcement of the express condition.
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Chapter 2 Contract Formation 498 results (showing 5 best matches)
- Those offers that required a return promise would result in a contract upon the giving of the promise by the offeree in return for the promise by the offeror. At the moment of creation, both sides had unperformed promises, and the contract was thus a bilateral contract. (Today the bilateral contract is still the more common type of contract in business transactions.)
- The Restatement, First applied the traditional structure in which every offer is either an offer for the formation of a unilateral contract or a bilateral contract. As stated in the preceding section, this requires that one characterize the nature of the contract that the offeror proposes in order to determine whether the offeree must give a return promise or perform the requested act to create a contract.
- Common law contract decisions from the early part of the twentieth century were often predicated upon a high degree of formalism. To convince a court that a contract existed, counsel had to establish precisely which communication was an offer and precisely when and how the offeree accepted that offer to create a contract. All essential terms were provided by the parties or there would be no contract. Court opinions often stated that it was the task of the courts to enforce contracts made by the parties, not to make contracts for them. If an offer was arguably one for a unilateral or a bilateral contract, the existence of a contract would be dependent upon proving to the court which type of contract the offer proposed and proving that the offeree in fact accepted in the “proper” fashion.
- The parties who make a contract are free to modify that contract in the absence of some intervening third party’s rights. There is no theoretical or practical problem with an offeree accepting an offer, thus concluding the contract, and proposing a modification of the contract just formed, even in the same communication.
- The seller, perhaps believing there is a contract on its terms, ships the goods and the buyer, perhaps believing there is a contract on its terms, takes possession of the goods and uses them. There was no contract formed under subsection (1) of 2–207, but subsection (3) of 2–207, as well as § 2–204, recognize that the conduct of the parties can result in a contract. When this occurs, there is a need to determine the terms of the contract. Subsection (3) of 2–207 does this in a simple manner.
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Chapter 12 Assignment of Rights and Delegation of Duties 54 results (showing 5 best matches)
- A delegatee does not become liable for the performance of contract duties unless he assumes those duties by expressly or impliedly promising to perform. If the delegatee does assume, the promise to perform creates contract rights in the delegator who may bring an action against the delegatee for its breach. The delegatee’s promise to perform also creates contract rights in the obligee who may bring an action as a third party beneficiary of the contract between the delegator and the delegatee, in which the delegatee promised the delegator that the delegatee would perform the duties owed to the obligee. Most third party creditor beneficiaries base their rights upon agreements in which a delegatee assumed contract duties (§ 11.2).
- “Assignment of the contract” may mean that the assignor manifests an intention to transfer the contract rights and to delegate the contract duties. The assignee/delegatee may expressly promise to perform those duties or in some cases will be found to have impliedly promised to perform the delegated duties by consenting to the transaction. If such a promise is found, the delegatee will be liable to the other party to the contract. (That party is a third party beneficiary of the contract of delegation.) The delegatee can also be liable to the assignor/delegator for breach in the event of nonperformance.
- Contract rights are property rights and as with most property rights, there are strong policy reasons to make them transferable. Like any other transfer of a property right, once an irrevocable transfer of a contract right has been accomplished, the transferor’s legal interest in the right is extinguished and the right becomes the property of the transferee. This transfer of a contract right is called an assignment.
- It is not uncommon to read that one party “assigned the contract” to another. This is an ambiguous expression that must be interpreted by use of surrounding facts and circumstances. The question to be answered is whether the parties intended only an assignment of the rights, or both an assignment of the rights and delegation of the duties. An “assignment of the contract” may mean that the assignor intends to perform the contract duties and manifests an intention only to transfer the contract rights. This is the typical situation if the assignment is made to a bank or other lender as security for a loan. For example, a lender may advance money to a contractor and take an assignment of the right to payment on certain construction contracts. This is done to protect the lender in the event the contractor does not repay the loan. It would be most unlikely that a court would find that the lender has assumed the duty to build the structures.
- Debtors other than consumers may expressly waive defenses against an assignee in the original contract with the assignor ( ). When one party to a contract plans to assign rights thereunder (typically a seller of goods or services contemplating assigning the right to payment), that party may seek a contract term in which the buyer waives contract defenses against an assignee. This simple contract term can have far-reaching implications, because the buyer can end up paying money to the assignee for defective goods or for goods that were never delivered or services that were never properly rendered.
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Chapter 13 Discharge 53 results (showing 5 best matches)
- An oral rescission is valid even if the statute of frauds required the contract that is being rescinded to be in writing. (See Restatement (Second) of Contracts (1981) (“Restatement”) § 148.) State statutes that provide that a contract in writing can be modified only by another contract in writing, or by an executed oral agreement, have usually been held to apply only to a “modification” and not to a rescission. Under common law, a contract can be orally rescinded even though it expressly states it can be modified only by a written document.
- A novation differs from a simple assignment and delegation in that in a delegation, the delegator (Al in our example) remains liable as a guarantor for the contract performance. In a novation, the original party to the contract (Al) is discharged and has no further rights or liability.
- The UCC avoids these problems in transactions in goods by providing that when the parties mutually terminate a contract or when either party puts an end to a contract for breach by the other, unless the contrary intention clearly appears, remedies for breach of contract are preserved (§§ 2–106(3) and (4) and 2–720).
- A substituted contract involves the parties agreeing upon a new obligation, with the result that the old obligation is immediately discharged. Substituted contracts and accord agreements look a lot alike. Both involve the situation in which a debtor (the obligor) owes a duty but enters into an agreement with his creditor (the obligee) to perform some different duty instead.
- If A has materially breached a contract with has the right to rescind and thereby discharge all rights and duties under the contract. (If has conferred benefits upon A, may have an action against A in restitution. See Chapter 10.) also has the right to declare a total breach, which will discharge both ’s obligation to perform as well as any obligation to accept further performance from A, but still preserve the entire contract. If should not be seeking to “rescind” the contract. If the victim of a material breach responds by stating that the contract is “rescinded,” there is the risk that a court may interpret that term literally and thereby deny the victim any right to recover damages for the breach.
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Chapter 10 Restitution (Unjust Enrichment) 34 results (showing 5 best matches)
- In each of these situations, there is no enforceable contract on which a suit may be grounded. Even in those instances where there once was a contract, by the time the suit is filed the contract has been rescinded, avoided or excused. Yet partial performance by one party may have enriched the other before the contract was terminated or before it was realized that the contract was not enforceable.
- Law schools no longer teach Restitution as a separate subject. It receives some mention in Contracts classes where restitutionary remedies are included along with contract remedies. There are fundamental differences between the two areas of law, and failure to focus briefly upon these differences can leave students confused and ill-informed. For these reasons, we are including a discussion of restitution in this volume devoted to contracts so that you might be aware of how an action in restitution may arise. You will see how an action for restitution may be available in a fact pattern in which there was a contract or an attempted contract.
- There are numerous situations in which a party has rendered performance upon a contract or purported contract only to discover that there is no contract remedy. Consider the following possibilities. The negotiation process may fall short of that legally required to form a contract. The partially performed contract may be unenforceable because of failure to comply with some formality such as a writing requirement. The purported contract may have been void from the beginning for a reason such as lack of capacity. An apparently valid contract may have been avoided because of the presence of some defense. Performance of a valid contract may have been excused because of impossibility or frustration of purpose. A valid enforceable contract may have been unilaterally rescinded based upon a material breach by the other party.
- Restitution is a separate body of substantive law. It is not part of the law of contracts. Just as an action may be brought in tort or in contract, so can an action be brought in restitution. There is even a separate Restatement of Restitution.
- Assume that Dan falls unconscious. A good Samaritan ( ) places Dan in her car and hauls him to the nearest hospital. In the emergency room a doctor provides medical services while Dan remains unconscious, but Dan dies. There is no tort in this fact situation nor is there any contract. Contracts require a manifestation of assent to be bound and none is present. If any recovery is to be had, it must be in restitution.
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Chapter 3 Statute of Frauds 113 results (showing 5 best matches)
- If the oral contract does not involve a transaction in goods but is within some other provision of the statute of frauds, parties to the oral contract are permitted to admit (orally) the existence and terms of the contract and still assert the absence of a writing as a defense to the enforceability of the oral contract. However, if the admission is in a signed writing, that writing itself may fulfill the statutory requirement.
- Some state statutes describe as “void” any contract subject to the statute if the requirement of a signed writing is not met. However, such contracts have considerable legal force and the lack of a writing may be considered as only rendering the oral contract unenforceable but not void. If an oral contract was formed it will be valid. However, even though valid, the contract will be unenforceable if: (a) the contract is required by a statute to be in a signed writing; and (b) the party against whom enforcement is sought affirmatively raises the statute as a defense to the enforceability of the contract. If a party proves the existence of the oral contract and its terms, and the other party does not assert in a timely manner the absence of a writing as a defense in accordance with the jurisdiction’s rules of civil procedure, this defense may be deemed to be lost or waived. If the contract were truly “void,” then the many exceptions (discussed later) should not operate to make a “void”
- The statute of frauds is a personal defense in that only a party to the contract or a party’s successor in interest can assert the absence of a signed writing to challenge the enforceability of the contract. Thus, an oral contract to buy a house can give the buyer an insurable interest which is needed for the buyer to purchase a valid insurance policy. If the house burns before risk of loss passes to the buyer, the insurance company, which is not a party to the contract for the purchase of the property, cannot challenge the buyer’s interest in the property on the basis of the statute of frauds. Also, the tort of interference with contractual relationships can be found despite the fact the contract is oral, and the existence of an unenforceable oral agreement may be introduced into evidence in any action for purposes other than its enforcement.
- The statute of frauds is commonly referred to as an “affirmative defense to the enforcement” of a contract, with the result that a party must affirmatively and timely assert the statute as a defense to enforcement of the contract. This is the same as a “defense to the formation” of a contract, which can include situations in which there is a lack of capacity to contract, or misrepresentation or mistake in its formation, etc. Put another way, even if there was a contract formed, with offer, acceptance, and consideration present, the statute of frauds may make that contract unenforceable if it is not evidenced by a signed writing. Likewise, finding there is a signed writing, or an exception to satisfy the statute of frauds, does not dispense with plaintiff’s need to prove offer, acceptance and consideration.
- Most jurisdictions include within the statute of frauds leases of an interest in land with a duration of more than one year. Assume that L and T enter into an oral contract for a one-year lease to commence on the first day of the following month. This contract does not involve an interest in real property of more than one-year’s duration, but it is a contract that is not capable of being performed within one year of the day of making. Some jurisdictions, probably the majority, hold that the dominant nature of the agreement is an interest in land, and since it does not come within the statute of frauds as an interest in land lasting beyond one year, there is no writing requirement. (See Restatement § 125, comment b.) Other jurisdictions, California, hold that since the contract cannot be performed within one year, it comes within another section of the statute, and a writing is required.
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Outline 112 results (showing 5 best matches)
Chapter 9 Remedies 134 results (showing 5 best matches)
- A breach of contract can cause emotional distress damages, but ordinarily such damages are not recoverable in a contract action because they are legally assumed not to be foreseeable. In commercial transactions, emotional distress is not a natural and probable consequence of a breach, nor does the breaching party usually know facts that would cause such damages to result. However, in specialized contracts, emotional distress might be foreseeable. A frequently cited example is a contract with a mortuary for funeral services. In fact, emotional distress is probably the only foreseeable damage resulting from breach of such a contract. One might develop a logical argument that emotional distress damages are also a foreseeable result of breach in such matters as employment contracts, but courts have demonstrated reluctance to permit recovery for this element of damage.
- Specific performance, sometimes referred to as “specific enforcement of a contract,” involves an order of the court compelling the breaching party to complete the contract performance. In the Anglo-American legal system, common law courts could not specifically enforce a contract. Orders compelling a breaching party to perform could only be decreed by a court of equity, and a court of equity would not act unless the remedy at law was inadequate. While courts of law and equity have been merged today in most states, the requirements for obtaining specific performance have not been substantially changed. Thus, specific performance is not available for any contract breach in which the money damage remedy at law is considered adequate to place the innocent party in the position that party would have enjoyed had the contract been performed. In restitution cases, a party might get a court order directing restitution of the specific property delivered to the defendant under the contract. (...
- For reasons that are partly historical, all real property is considered to be unique. In a particular case, goods may also be unique. Such contracts meet the first test for specific performance (that the remedy at law be inadequate). Under , specific enforcement of contracts for the sale of goods may be had “where the goods are unique or in other proper circumstances.” What constitutes “other proper circumstances” is left for development by case law. Cases in which specific performance has been granted under this section include long-term supply contracts for goods that are in short supply. In these cases the goods themselves were not unique (petroleum products for example), but if a seller breaches during a time of shortage, the buyer may be able to prove that no market existed in which the buyer could enter into a comparable long-term contract with another party. Thus, the contract obligation might be characterized as unique. The trend in recent years has been to expand upon the...in
- As one considers the issue of foreseeability of damages in contract law, it is hard to avoid comparisons with foreseeability in tort. The concepts are dissimilar. Tort law involves concepts of foreseeability to determine the issue of liability; to decide, for example, whether Mrs. Palsgraf is a proper plaintiff. In contract law, one generally knows who is the proper plaintiff. Foreseeability is involved to determine what elements of damage the known plaintiff can include in the recovery. To the extent that the same judge will exhibit more conservative tendencies in a contract case than in a tort case, the factors discussed in the fourth paragraph of this section, with respect to the greater certainty required in the proof of damages in contracts v. tort law, are probably also relevant here.
- A basic remedy of a buyer of goods under the UCC is the right to reject the goods if there is a non-conforming tender. The standard applied in determining if there is a right in the buyer to reject the goods is dependent upon whether the contract calls for delivery of the goods in a single lot or whether the goods are to be delivered in separate installments to be separately accepted (§ 8.9). Compare the language of for the distinction between a single lot contract and an installment contract. appears to favor the finding of a single lot contract, which obligates the seller to tender all of the goods at one time. However, if there were language or circumstances indicating that the goods can be delivered in separate lots, then would dictate a finding that it is an installment contract.
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Chapter 11 Third Party Beneficiaries 37 results (showing 5 best matches)
- does a third party beneficiary’s right vest? Different jurisdictions find third party’s rights to have vested upon the occurrence of one of three events. First, there are cases which hold that rights vest immediately at the time the contract is made. This is true even when the beneficiary does not learn of the contract until a later time. Second, a number of cases hold that rights vest at the time the third party acquires knowledge of the contract and agrees to accept the benefits thereof. If the beneficiary learns of the contract and does not expressly reject the benefits, then acceptance is ordinarily presumed. The third and probably the most commonly applied rule requires a change in position by the beneficiary in reliance upon the contract in order for the beneficiary’s rights to vest. Ordinarily, only a slight change in position is required,
- Assume that there is a contract between A and in which agrees to pay money to A in exchange for which A agrees to paint ’s house. The performance by A is a direct benefit to is an express beneficiary and the primary purpose of the promisee, , in entering into such a contract appears to be to confer a benefit upon will be found to be a third party beneficiary, donee or creditor depending upon the motivating force behind can acquire enforceable rights under the contract. If ’s motives are partly charitable and partly to satisfy an obligation, will ordinarily be classified as a donee beneficiary in those jurisdictions in which the rights of a donee are superior to those of a creditor.
- Contracts may be formed in which one party’s performance is to be rendered directly to a third party or the performance will indirectly confer a benefit upon a third party. Early common law courts were reluctant to recognize enforceable contract rights for these third parties. They had difficulties with the theoretical aspects of permitting a third party, who had no privity with the promisor and from whom no consideration “flowed,” to enforce the contract. Today all American jurisdictions have accepted principles of contract law that allow enforcement of such third party beneficiary contracts.
- A third party acquires the right to enforce a contract only if the court finds that the principal parties to the contract intended to create legally enforceable rights in the third party. This test has been expressed using varying terminology in different jurisdictions. Some require a finding that the third party was a “direct” beneficiary, some require that the third party be the “primary” beneficiary, and others inquire whether the contract was made for the “express benefit” of the third party. No matter how it is articulated, the critical test is whether the third party was intended to have enforceable rights under the contract.
- In contracts to which governmental entities are parties, one might assume that the government would prefer to do its own contract enforcing and reserve the right to rescind or modify a contract or determine the manner and extent of enforcement action. Thus one might assume that giving a right of action to a third party beneficiary might not be “appropriate to effectuate the intention of the parties.” However, assume that a government contract requires a builder to construct homes to certain minimum standards for a class of buyers such as military veterans. In this circumstance it has been successfully argued that the government did intend to give the home buyers the right to enforce the contract promises. Apartment tenants have been found to be intended beneficiaries of the financing contract between a Federal Agency (HUD) and their landlord ( ). Individual beneficiaries would have a direct interest and might be better motivated to pursue the action than a busy government attorney....
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Chapter 7 Contract Modification 72 results (showing 5 best matches)
- If the original ($9,000) contract was rescinded and a new contract made for $11,200, then there is no consideration problem. There is no preexisting duty if the first contract was rescinded. If facts exist from which such an analysis might be made, should prevail, and in some jurisdictions, courts are quick to assume that there was such a rescission and new contract.
- A common definition of a waiver is: “a voluntary relinquishment of a known right.” One can waive most conditions in a contract. One cannot waive an essential part of the bargain, such as the return performance due. Thus, generally speaking, one cannot waive the right to receive a promised performance nor can one waive a condition that is a fundamental part of the bargain. In a fire insurance contract, destruction of the property by fire is a condition to the insurer’s liability. Such a fundamental condition cannot be waived. In that same insurance contract, filing a proof of loss within thirty days of the occurrence of a casualty was perhaps also an express condition to the insurer’s liability. This condition can be waived, since it is not related to the risk assumed and is not an essential part of the bargain.
- Is there a statute requiring that the modification be evidenced by a signed writing? And, if there is already a written contract in existence does the existing contract by its terms require that any modification be evidenced by a signed writing?
- The issues that might arise as to the existence and enforceability of an agreement to modify an existing contract are very similar to those that could arise in regard to the existence and enforceability of the original contract itself. However, because there is already an existing contract relationship between the parties, the attempted modification must be measured against the express terms and other duties imposed by the existing contract. Therefore, the modification issues will potentially have some unique aspects that do not exist at the time of formation of the original contract. You should keep in mind when addressing modification issues not only the general principles of contract formation but also the special issues that could arise because of
- Contract modification, like formation, needs mutual assent. A party who has manifested assent to the modification may be able to show that the assent was induced as a result of mistake, misrepresentation, undue influence, or duress. All of these defenses to formation of a contract are applicable to modifications and subject to the same rules as discussed in Chapter 5.
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Chapter 4 Contract Interpretation 135 results (showing 5 best matches)
- Attributing a standard meaning to language used in a contract promotes consistency and predictability, whereas introduction of subjective meaning to alter contract relationships derogates from these goals. Therefore, courts are concerned with the plain meaning of contract language. This is perhaps even more important in international transactions where deviation from the literal meaning of contract terms in the interpretation process may open the door to unexpected results. The following rules are designed in part in response to these concerns.
- A few hours observing trial court judges in action interpreting written contracts will likely convince the observer that trial court judges are concerned with what the parties meant. Judges are painfully aware that these concerns will be antagonistic in some cases. A judge will listen, usually patiently, to the buyer telling what he or she thought the contract provided. If the judge concludes that this understanding is not in accord with what the contract language reasonably states, the judge will consider the factors mentioned in Restatement § 201(2) (quoted above). Finally the judge may rule for the seller, telling the buyer that the buyer must read and understand contracts before he or she signs them, or the judge may rule for the buyer, telling the seller that the seller should have understood what the buyer thought the contract stated. The judge will then retire to chambers muttering about what an imperfect world we live in.
- Some cases distinguish between merger clauses contained in writings negotiated by the parties which are ordinarily given full effect, and merger clauses contained in standard form or adhesion contracts where the clause is less likely to be given literal meaning. Parol evidence issues arise with some frequency in cases where the parties used standard form contracts. These contracts usually do not lend themselves to convenient alteration to include special terms to which the parties agreed, and this is one reason why a court is less likely to hold a form contract to be a complete integration.
- Bad faith as a tort invokes the social policy of tort law and produces tort remedies. This law emerged in California in the 1950s with cases involving insurance carriers acting wrongfully in the settlement of claims involving their insureds. Of those jurisdictions that recognize this tort action, most confine it to acts committed in the performance of contracts that are affected by a public interest, such as insurance contracts. These are sometimes described as contracts in which there is a special relationship between the parties.
- There are mandatory contract terms in every legal system. These terms represent fundamental public policy and therefore the parties may not change them even by express agreement. One example of a mandatory term is the requirement of good faith or good faith and fair dealing which is discussed in the previous section. Another example of a mandatory term is found in minimum wage laws. Where these laws apply, the minimum wage is a mandatory term in employment contracts. The parties may not contract for a lower wage by use of any express or implied agreement between them. Other examples are found in legislation such as consumer protection statutes, which mandate certain contract terms that the parties are not free to modify.
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- generally recognized as a defense to contract formation in the absence of some fiduciary relationship. Bad faith is relevant as an issue in contract performance and enforcement.)
- If the agreement is not enforceable as a modification of the contract, can it still be effective as a waiver of a condition in the contract?
- If it is an installment contract, has there been a breach that constitutes a substantial impairment of the value of the installment tendered and cannot be cured (§ 2–612(2))? (If so, buyer may reject that installment.) Has there been such a breach that it substantially impairs the value of the entire contract? (If so, buyer may terminate the entire contract, § 2–612(3).)
- Did the parties manifest mutual assent in another fashion? ( , “A and signed a written contract.” In which case, it is irrelevant who was the offeror or offeree.)
- Post-contract event that causes one party’s purpose in entering the contract to be substantially
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- If it is evident that there are further terms to be negotiated, or if there is some prospective difficulty in sorting out precisely what has been agreed to in the course of negotiations, then the request that a complete writing be drafted and signed may indicate that a further or final assent to be bound is necessary. In the given facts, the offer is contained in one writing and the offeree’s assent is unqualified. Thus it does not appear that there are terms yet to be agreed upon. There could be further details that might be resolved in the process of preparing a formal contract, but none are indicated in the facts. Thus we can find assent to be currently bound, and the signed written contract is intended as a formality. used language (“accept your offer”) that connotes present intent to be bound, and the anticipation of a formal writing does not preclude finding that the parties are already bound to a contract (§ 2.1).
- Ordinary service contracts are not within the statute of frauds unless the contract by its terms is incapable of being performed within one year of the date of making. (One could enforce an oral contract to build a twin of the Sears Tower or the Grand Coulee Dam, because each be built within a year.) If the A- contract is for services to be performed by A, the statute of frauds does not apply. If this is viewed as a contract for goods, then the UCC would make the oral contract unenforceable unless further facts bring the case within one of the exceptions found in
- made an offer in writing to : “Accept your offer. This contract should be reduced to writing and signed by us.” Is there an enforceable contract?
- Alternatively, A has also relied upon the oral contract by making full payment, and A might contend that this reliance provides an alternate basis to make the promise of enforceable (§ 3.6.4). However, since A is entitled to recover the monies paid on a restitution theory, a court should find that no injustice would result if the oral contract were not enforced (§ 10.1.5). Hence, ’s oral promise would not be enforceable under an estoppel theory as A has a claim in restitution for the monies paid.
- The most compelling argument in favor of finding an offer is the statement that the power to form a contract by accepting, then there would be no reason to give a 10-day limit. The ultimate question is what a reasonable person in
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- Contract liability is strict liability. It is an accepted maxim that contracts are to be kept. The obligor is therefore liable in damages for breach of contract even if he is without fault and even if circumstances have made the contract more burdensome or less desirable than he had anticipated.
- Party A will not be excused if it can be shown that A assumed the risk that the intervening event would occur or if the impossibility resulted from A’s fault. In that situation, A can be held liable for damages even if actual performance of the promise is literally impossible. Students of contract law sometimes jump to the conclusion that since performance is impossible, any discussion of the question whether performance is excused or not is irrelevant. Since damages are the most common remedy for contract breach, the fact that performance is impossible does not preclude giving a remedy to the other party. For example, if Construction Company (CC) contracts to sell a specific new home to Buyer #1 but inadvertently sells the same house and conveys title to Buyer #2, the performance of the contract with Buyer #1 is now impossible. However, the contract with Buyer #1 is not excused because the impossibility is due to CC’s own fault. CC remains liable on that contract and Buyer #1 can...
- Finally, risks relating to certain events are allocated to one party by operation of law and thus the occurrence of such an event does not affect the basic assumptions of the contract. The most common example is the risk that prices will change. As discussed in the previous section, the basic reason for entering a contract for future purchase and sale of goods, other than tying down a source which is necessary in some situations, is to protect oneself against price fluctuations. Both parties are quite aware of the fact that prices will change. That may be why they made the contract. Thus, even a substantial change in prices does not excuse performance.
- To excuse performance, it is essential that both parties understand the purpose for which the contract is being made and that the failure of that purpose makes the contract performance totally valueless or almost totally valueless to the party seeking relief. Parties have attempted to apply this concept to a situation in which an event occurred that frustrated plans to make money from the contract performance. For example, tenants/lessees have sought relief from long-term leases of service stations when the highway was moved or gas and tire rationing was imposed. These efforts to obtain relief from unprofitable contracts almost invariably fail. The purpose of the contract is not frustrated; the only frustration is with the profitability expected by the tenant/lessee. Courts sometimes refer to this type of situation as being one of “economic frustration,” or “commercial frustration” for which relief is denied.
- Contract duties can be excused by the occurrence of an event if the contract was made on the basic assumption that this event would not occur. Events that excuse performance include those that make performance of the contract literally impossible or, as discussed in the next section, events that make performance commercially “impracticable,” what is commonly referred to as “practically impossible.” Included within “impossibility” are subsequent changes in the law that make performance illegal, even though factually still possible. (See example (3)
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- Publication Date: November 15th, 2016
- ISBN: 9781634599146
- Subject: Contracts
- Series: Nutshells
- Type: Overviews
- Description: This Nutshell provides a comprehensive guide to the law of contracts. It contains expert explanations of contract concepts under both the common law and Article 2 of the Uniform Commercial Code. It also includes the basics of the Law of Restitution and an introduction to digital contracting.
