Business Law II

Professor Pamela Gershuny

Fall 2011

• UCC (Uniform Commercial Code)– Greatest Single Law Reform– Goods

• Restatement (Second) of Contracts– Construction or Real Estate

• A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.

• A promise is an assurance that one will or will not do something in the future.

• Timeline

T1

Formation

• Course of Performance

• Usage of Trade

• Course of Dealing

BUSINESS LAW II

Formation

Performance

Enforceability

TYPES OF CONTRACTS

BUSINESS LAW II

TYPES OF CONTRACTS

BUSINESS LAW II

1. Bilateral – A promise for a promise.

2. Unilateral – A promise for an act (acceptance is the completed performance of the act).

TYPES OF CONTRACTS

Formation (7)

BUSINESS LAW II

3. Express – Formed by words (oral, written, or a combination).

4. Implied in fact – Formed by the conduct of the parties.

5. Quasi contract (implied in law) – Imposed by law to prevent unjust enrichment.

TYPES OF CONTRACTS

Formation (7)

BUSINESS LAW II

6. Formal – Requires a special form for creation.

7. Informal – Requires no special form for creation.

TYPES OF CONTRACTS

Formation (7)

BUSINESS LAW II

TYPES OF CONTRACTS

BUSINESS LAW II

1. Executed – A fully performed contract.

2. Executory – A contract not fully performed.

TYPES OF CONTRACTS

Performance (2)

BUSINESS LAW II

TYPES OF CONTRACTS

BUSINESS LAW II

1. Valid – The contract has the necessary contractual elements: agreement (offer and acceptance), consideration, legal capacity of the parties, and legal purpose.

TYPES OF CONTRACTS

Enforceability (4)

BUSINESS LAW II

2. Void – No contract exists, or there is a contract without legal obligations.

3. Voidable – One party has the option of avoiding or enforcing the contractual obligation.

TYPES OF CONTRACTS

Enforceability (4)

BUSINESS LAW II

4. Unenforceable – A contract exists, but it cannot be enforced because of a legal defense.

TYPES OF CONTRACTS

Enforceability (4)

• Employment at Will

• Promissory Estoppel

End of Types of Contracts

OFFERS

A promise or commitment to do or refrain from doing some specified thing in the future.

1. Serious intent of offeror

2. Terms must be reasonably certain

3. Communicated to offeree, so that offeree is aware

1. INTENTION

• Objective Test– No jokes or rages– No opinions

– No plans

– No ads

– No negotiations

2. DEFINITENESS OF TERMS+gap filling by court

• Identification of Parties• Identification of the subject

matter of the K– Quantity, services to be

performed(Ruud), goods 2-204, or land

• Consideration• Time of payment, delivery, or

performance

3. COMMUNICATION

ACCEPTANCEA voluntary act, either words or conduct that shows assent to an offer. Must be unequivocal and communicated to offeror.

• Unequivocal/mirror image rule

• Not silence• Communication• How?

– Made in a manner and by a medium invited by the offer is operative as soon as out of the offeree’s possession, whether or not the offeror receives it

• Express term

EXCEPTIONS

• Sent to wrong address, wrong postage, etc.

• “not effective until rec’d” term

• First communication rec’d in case of conflict

DOT COM ORDERS

• So far so good

• Faxed orders– 1-201(25-27)

REJECTION