A. Definition: Contract law is an enforcement of a single promise, not an agreement at whole. a. Contract law is state law. It is common law by default, unless a statute has been passed covering the issue. Right to contract is guaranteed primarily by common law and some statutes, NOT by the constitution. Our law does not recognize any natural right to freedom of contract or economic activity. B. Sources of Contract Law
b. Common Law: applies if the UCC is silent on a subject or if there is a conflict. c. The UCC: governs the sale of goods in all states but LA. Use the predominant factor test if there is a sale of goods and a service. C. Theories of Contract Law
d. The three types of Policy theories are:
e. Natural Law Theory
iv. Natural law theory: the laws should just pop out from within us because they just occur w/in us. By our close observation of nature we see what they should be. Almost as if they occur within us. D. Types of Contracts
f. Bilateral Contracts: A promise for a promise.
g. Unilateral Contracts: A promise for a performance. h. Accord & Satisfaction: settlement of a dispute Associated Builders, Inc. v. Coggins. v. Accord—A contract to accept substituted payment, satisfied with the execution of the payment. vi. Satisfaction—the acceptance of the payment is the performance of the accord. vii. Rule from AB v. C: a party (AB) waives a contractual right arising from a breach because of a late payment when that party (AB) accepts tender of (C’s) the late payment.
A. Competent Parties
i. Voidable at the election of the minor.
ii. Contracts of minors are voidable; Minors are only liable for the value of necessaries in such contracts. iii. Minor can come back after age of majority and reaffirm b. Intoxication
iv. Can be intoxicated and held to K.
v. If you are intoxicated to a point beyond comprehension/ severely intoxicated. To drunk to understand nature of K. c. Mentally incompetent/ Insane
vi. Must be mentally incompetent at time of contract, not after. So mentally incompetent that they cannot comprehend the contract.
B. Legal Subject Matter
vii. A court will not lend its aid to either party to a K founded upon illegal consideration. d. Immoral Consideration
e. Campaign Promises
ix. A political campaign promise is legally insufficient to create a binding K unless it is so intended by the promisor and promisee x. Policy: Allowing so would break checks/ balances and shift power from legislature to the courts. f. Plea Bargains
xi. The policy of the gov’t being able to enter into such agreements makes them enforceable, regardless of consideration. g. At-Will Employment
xii. Courts will not enforce an employer’s right to fire for public policy issues such as: 1. Employee fired for refusing to commit an illegal act a. Ex/ Armored car/ Liquor store preventing
2. For doing a public duty (jury duty)
h. Defined Generally: Consideration is the price of the promise. Promise induces consideration; consideration induces promise. Consideration is a necessary prerequisite to a valid contract Space Imaging Europe v. Space Imaging LP. There are two elements: xiii. Bargain for exchange
xiv. Proper form
3. Benefit to the promisor
4. Detriment to the promisee
5. Mutual Promises
i. Inadequacy does not render a contract unenforceable. Lopsided contracts are still enforceable. Batsakis v. Demotsis