Contract fuction of contract element of contract, type of contract

1. Contracts: Nature and Terminology.
contract
Introduction
Promise is a declaration that something will or will not happen in the future.
What is a Contract?
 Contract is an agreement (based on a promise)that can be enforced in
court.

What law governs?
 Service contracts – commonlaw of contracts.
 Sale and lease contracts – Uniform Commercial Code (UCC).
Function of Contract Law
Designed to provide stability and predictability, as well as certainty, for
both, buyers and sellers in the marketplace.
Necessaryto ensure compliance with a promise or to entitle the innocent
party to some form of relief.
Definition of a Contract
A contract is a:
 Promise or set of promises,
 For which breach of which,
 The law provides a remedy, or
 The performance of which the law in some way recognizes as a duty.
Objective Theory of Contacts. Circumstances to determine intent of parties.
Elements of a Contract
Agreement(Offerand Acceptance).
Consideration.
Contractual Capacity.
Defense:
 Legality.

2.  Genuineness of assent.
 Form.
Typesof Contracts
Bilateral v. Unilateral.
Bilateral– Offeree must only promise to perform (“promise fora promise”).
Unilateral – Offereecan accept the offeronly by completing the contract
performance (“promiseforan act”).
Irrevocable: Offercannot be revoked once performance has begun.
Typesof Contracts
Express v. Implied In Fact.
Express: Words(oral or written).
Implied In Fact: Conduct creates and defines the terms of the contract.
Requirements:
 PL furnished good or service
 PL expected to be paid
 DEF had chance to reject and did not.
Case 9.1: Homerv. Burman (2001).
QuasiContracts– Implied in law.
 Fictional contracts created by courts.
 Imposed on parties for the interest of fairness and justice.
 Equitable remedies.
 Quantum Meruit.
Case 9.2: Industrial Liftv. Mitsubishi (1982).
Formal v. Informal.
Executedv. Executory.
Executed– A contract that has beenfully performedon both sides.
Executory– A contract that has not been fully performed oneither
side.
Enforceability
Valid.
Elements: Agreement,consideration, contractual capacity, and legality.
Void.
No contract.
Voidable (unenforceable).
Valid contract can be avoided or rescinded.

3. Interpretation ofContracts
Plain Meaning Rule: Courts give terms their obvious meaning.
Ambiguous Terms. If terms are ambiguous, court will attempt to interpret
ambiguous contract terms in a reasonable, lawful, effective manner.
 Contracts are interpreted as a whole.
 Terms negotiated separately given greater weight.
 Ordinary, commonmeaning given.
Interpretation ofContracts
Ambiguous Terms (cont’d)
 Specific wording given greater weight than general language.
 Written or typewritten given greater weight than preprinted.
 Ambiguous terms interpreted against the drafter.
 Trade usage, prior dealing, course of performance to allow to clarify.
Case 9.3: DispatchAutomation v. Richards (2002).