Chapter 10 Contracts: Nature and Terminology BUSINESS LAW: Text & Cases — Legal, Ethical, International, and E-Commerce Environment11 th Ed. BUSINESS LAW:
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Chapter 10 Chapter 10 Contracts: Nature and Contracts: Nature and
TerminologyTerminology
BUSINESS LAW: Text & Cases — BUSINESS LAW: Text & Cases — Legal, Ethical, International, and Legal, Ethical, International, and E-Commerce EnvironmentE-Commerce Environment 1111thth Ed.Ed.
Overview of Contract LawOverview of Contract Law A contract is a:A contract is a:
– Promise or set of promises,Promise or set of promises,– For breach of which,For breach of which,– The law provides a remedy, orThe law provides a remedy, or– The performance of which the law in The performance of which the law in
some way recognizes as a duty.some way recognizes as a duty. Objective Theory of Contacts. Objective Theory of Contacts.
Circumstances to determine intent of Circumstances to determine intent of parties. parties.
§2: §2: Elements of a ContractElements of a Contract Agreement (Offer and Acceptance).Agreement (Offer and Acceptance). Consideration.Consideration. Contractual Capacity.Contractual Capacity. Legality. Legality. Defenses:Defenses:
– Genuineness of assent.Genuineness of assent.– Form.Form.
§3: §3: Types of ContractsTypes of Contracts Bilateral v. Unilateral.Bilateral v. Unilateral.
– BilateralBilateral - Offeree must only promise to perform - Offeree must only promise to perform (“promise for a promise”).(“promise for a promise”).
– UnilateralUnilateral - Offeree can accept the offer only by - Offeree can accept the offer only by completing the contract performance (“a promise completing the contract performance (“a promise for an act”). for an act”). Irrevocable: Offer cannot be Irrevocable: Offer cannot be revoked once performance has begun.revoked once performance has begun.• CASE 10.1 CASE 10.1 Ardito v. City of ProvidenceArdito v. City of Providence
Express vs. Implied-in-Express vs. Implied-in-FactFact
ExpressExpress: Words (oral or written).: Words (oral or written). Implied In FactImplied In Fact: Conduct creates and : Conduct creates and
defines the terms of the contract. defines the terms of the contract. Requirements:Requirements:– PL furnished good or servicePL furnished good or service– PL expected to be paidPL expected to be paid– DEF had chance to reject and did not.DEF had chance to reject and did not.– CASE 10.2 CASE 10.2 Gary Porter Construction v. Gary Porter Construction v.
Fox Construction, Inc.Fox Construction, Inc. (2004). (2004).
§4: §4: Quasi ContractsQuasi Contracts Quasi Contracts are implied Quasi Contracts are implied in law.in law.
– Fictional contracts created by courts.Fictional contracts created by courts.– Imposed on parties for the interest of fairness Imposed on parties for the interest of fairness
and justice.and justice.– Equitable remedies.Equitable remedies.– Quantum Meruit. Quantum Meruit.
§5: Interpretation of §5: Interpretation of ContractsContracts
Plain Meaning Rule: Courts give terms their Plain Meaning Rule: Courts give terms their obvious or ordinary meaning.obvious or ordinary meaning.– CASE 10.3 CASE 10.3 Wagner v. Columbia Wagner v. Columbia
Pictures Industries, Inc.Pictures Industries, Inc. (2004). (2004).
Other Rules of Other Rules of InterpretationInterpretation
Ambiguous Terms. If terms are ambiguous, Ambiguous Terms. If terms are ambiguous, court will attempt to interpret ambiguous court will attempt to interpret ambiguous contract terms in a reasonable, lawful, contract terms in a reasonable, lawful, effective manner. effective manner. – Contracts are interpreted as a whole.Contracts are interpreted as a whole.– Terms negotiated separately given Terms negotiated separately given
greater weight.greater weight.– Ordinary, common meaning given.Ordinary, common meaning given.