chapter 11 contract
chapter 11 contract Bus 391
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This 12 page Class Notes was uploaded by Tianyi Zhang on Thursday October 22, 2015. The Class Notes belongs to Bus 391 at University of Wisconsin - Milwaukee taught by Jon Saffold in Summer 2015. Since its upload, it has received 47 views. For similar materials see Business Law in Business Administration at University of Wisconsin - Milwaukee.
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Date Created: 10/22/15
CONTRACT VS PROMISEP 262 Promise A person s declaration that he will perform or refrain from performing some present or future act will or will not happen the future I Promisor the person making the promise I Promisee the person to whom the promise is made Contract an agreement between two or more parties for valuable consideration Every contract contain promise I Offeror the party making the offer I Offeree person to whom receive the offer The Objective Theory of Contracts circumstances to determine intent of parties Objective facts includes what a party said when entering into the contract How the party acted or appeared 0 Underlying Motives a party may have many reasons to entering an agreement gain real property goods or service Any of these purpose may provide a motivation for performing the contract Elements of a contract 1offerone party must offer to enter into a legal agreement 2 acceptance another party must accept the terms of the offer 3consideration any promise made by the parties to the contract must be supported by legally sufficient and bargained for consideration something of value received or promise such as money to convince a person to make a deal Things that are presumedDefenses to the Enforcement of a Contract 4 contractual capacity person understand the nature and consequence of the agreement 51egality the purpose of contract is legal not against public policy 6genuineness of assent A party who demonstrates that he or she did not genuinely assent to the terms of a contract may avoid the contract CONTRACT TYPES l Bilateral Contract a promise exchange for a promise two promises EX I promise to pay you 250 to trim my trees you promise to trim the tree The moment the promise exchange valid binding deal If promises are broken there maybe responsibility if losses are incurred All the time issue l Unilateral Contract a promise exchange for a act Only one promise Ex I promise to pay 250 to trim my tree you go out and do it Once the act has been made the other party s duty arises to fulfill his promise I Once the offeree of a unilateral contract begins to perform the offeror loses the ability to revoke her offer eg if Y offered to pay X an agreed price in exchange for X delivering a car to Y once X delivered the car Y could not revoke her offer to pay X I Formal Contract A contract that requires a special form or method of formation creation in order to be enforceable l Informal Contract A contract that does not require a specified form or method of formation in order to be valid EXPRESS AND IMPLIED CONTRACTS l Express Contract an agreement that is stated in words either orally or in writing I ImpliedinFact Contract a contract in which the agreement of the parties is inferred from their conduct Ex at a check out counter at a grocery store actions of the parties create offeracceptance 1 Service or property provide by one party to another 2 Expectation if they provide the service they have reasonable expectation would be pay for 3 Opportunity person receiving the service or property the person have opportunity to reject it Execution QUASI CONTRACT l Quasi Contract fictional contract is created by the court to prevent the unjust and enrichment of one party at expense of one another only happens when there is no actual contract cover the problem 1 unjust enrichment one party is benefit of one another Somebody pay you 2 Quantum Meruit value of service that was given I Courts typically will not allow a party to recover in quasi contract if the party conferring the benefit did so 1 officiously eg if a car dealership applies without your asking or agreeing to have it do so an expensive finish to a car you agreed to buy but before you take delivery you should not have to pay for the unsought benefit or 2 as a result of misconduct eg a relative s murderer cannot use quasi contract to recover a portion of your inheritance or negligence eg a driver who falls asleep at the wheel and loses control of his car which ends up sideways on the sidewalk in front of you cannot recover in quasi contract for preventing you from falling into an open manhole in the sidewalk OTHER CONTRACT TERMINOLOGY Executed a contract that have been fully performed on both sides Executory something left a contract that have not been fully performed on both sides VOID contact has no legal affect VOIDABLE On party is able to void the agreement CONTRACT INTERPRETATION The key to contract interpretation is to give effect to the intent of the parties as expressed in their agreement In keeping with the objective theory of contract intent is generally ascertained by considering 1 the words used by the parties in the agreement 2 the actions of the parties pursuant to the agreement and 3 the circumstances surrounding the agreement as they would be interpreted by a reasonable person rather than by considering the parties subjective intentions usually expressed after the fact The Plain Meaning Rule When a contract is clear and unequivocal a court will enforce it according to its plain terms set forth on the face of the instrument and there is no need for the court either to consider extrinsic eVidence or to interpret the language of the contract Rules of Interpretation When a contract contains ambiguous or unclear terms a court will resort to one or more of the following rules in order to determine and give effect to the parties intent RULES OF INTERPRETATION Insofar as possible the contract s terms will be given a reasonable lawful and effective meaning The contract will be interpreted as a whole and its various provisions will be harmonized to yield a consistent expression of intent Negotiated terms will be given greater consideration than standardform or boilerplate terms A nontechnical term will be given its ordinary commonlyaccepted meaning and a technical term will be given its technical meaning unless the parties clearly intended something else Speci c terms will prevail over general terms Handwritten terms prevail over typewritten terms which in turn prevail over printed terms Any ambiguity is construed against the drafting party A contract should be interpreted in light of pertinent usages of trade in the locale or industry the course of prior dealing between the parties and the parties course of performance of the contract