Tier American Contract Law Session 1.b - Uni Trier · WHAT(IS(A(CONTRACT(•...
Transcript of Tier American Contract Law Session 1.b - Uni Trier · WHAT(IS(A(CONTRACT(•...
Contract Law
Lawrence Siry
Overview • What is a Contract? (1)
– Contract Forma3on – Offer – Acceptance
• Enforcing a Contract (2) – Considera3on – Statue of Frauds
• Terms of Contract (3) – Parol Evidence Rule – Interpreta3on of Contracts
• Modifica<on and Avoidance of Contracts (4) – Promissory Estoppel – Voiding Contracts – Performance Problems
• Performance and Breach (5) – Execu3on of Contractual Du3es – Warran3es – Non-‐Performance – Remedies – Discharge
• Other Par<es (6) – Assignment and Delega3on – Third Party Contracts
WHAT IS A CONTRACT
• An Agreement between two or more par3es which creates rights and obliga3ons between the par3es, with the inten3on of the par3es to create legally binding responsibili3es.
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WHAT IS A CONTRACT
• Express Contract • Implied Contract
• Contract implied in law
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Sources of Law
• Cons3tu3on • Common Law
• State Contract Codes • Uniform Commercial Code
• Restatements
• UN Conven3on on Contracts and the Sales of Goods (CSIG)
Sources of Law
• US Cons3tu3on
• Ar3cle I Sec3on 10 • No State shall enter into any Treaty, Alliance, or Confedera3on; grant LeTers of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of ATainder, ex post facto Law, or Law impairing the Obliga3on of Contracts, or grant any Title of Nobility.
Sources of Law
• Cons3tu3on • Common Law
Hi The Common Law rical Background
– Brief History – 1066 – Development – The Writs
– Stare Decisis/Precedents/Res Judicata – Common Law v. Equity
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The Development of the Common Law
• Pre 1066. Anglo Saxon tribes-‐ Fluid.
• Localized Government and Judiciary
• Customary Law-‐ based upon Ecclesias3c Courts and local tradi3on and custom.
• Jus3ce not terribly efficient
Adapted from, American Contract Law PPT, Crystal, N. U. So Carolina
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Historical Background
• Common Law Judges
– Very few -‐ below 20-‐ I3nerate – Met in London to compare notes. – Judges were o_en religious men.
– Noble class.
• Doctrine of Stare Decisis (let the decision stand) developed.
• System of Appeals developed to provide a check and balance.
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Historical Background –The Writs
• System of no3ces and orders that required ac3on by one party or another.
• A standard form that was easily recognizable and requested the Court to order another person do something very specific.
• These ac3ons became formalized and became causes of ac3ons. Very strict parameters for fit into which writ.
• If a party used the wrong writ, relief would be denied: If there is no writ there is no remedy.
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Historical Background –The Writs
• Types of Writs/ Causes of Ac3on : Contract
– Trespass on the Case
– Replevin (recovery of property)
– ATachment
– Assumpsit 14
Writ of Habeas Corpus
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Historical Background –The Writs
• Benefit of stability, and fairness. Like cases are seTled in like ways. If a court wishes not to follow precedent, the court must either overrule or dis3nguish.
• Disadvantage of rigidity. If there is no writ, there is no remedy
• Contracts did not fit neatly into any par<cular Writ • Humber Ferry Case (Bukton v. Tounesende (1348))
– P contracted with D to ferry his horses across the Humber River . Boat sank. Horses were lost. P sued under Writ of Trespass of the Case.
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Writ of Assumpsit
• Writ to deal with Contractual Disputes • Promise to pay: • Made obsolete in England with the aboli3on of the causes of ac3on in 1852 and the Judicature Acts of 1875.
• Made obsolete in US Federal Courts with the passage of the Federal Rules of Procedure in 1932.
– Implied Assumpsit – Express Assumpsit
Historical Background –The Writs
• Stare Decisis– A judgewas obligated to let the decision of the lower court stand.
• Precedents-‐-‐ Decisions of the court (or higher level Court) that were binding on the lower court.
• Res Judicata– When an issue in a par3cular case is decided, it should not be re-‐li3gated.
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Historical Background –The Writs
• This rigidity lead to injus3ce. Individuals would pe33on the king for relief from this inequity.
• Addi3onally, the Common Law Courts primarily awarded damages.
• The King established a Court of Chancery or “Equity” to hear cases and to rec3fy the unfairness and rigidity of the Common Law Courts.
• These courts could issue Equitable Remedies
Adapted rom, American Contract Law PPT, Crystal, N. U. So Carolina
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Historical Background –The Writs
• Equity Courts were not bound by precedence and sought a just or equitable resolu3on to the problem. However, with 3me, tradi3ons, procedures and even precedents evolved in the Courts of Equity.
• Courts of Equity could order a party to take posi3ve ac3on. Equitable remedies included Injunc?ons and Specific Performance as opposed to Common Law Courts which could only give money damages
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Historical Background –The Writs
• In Re The Earl of Oxford. (1615) Equity prevails over Common Law.
• Difficulty developed as two par3es would o_en be in two courts on similar Issues.
• The Common Law and Equity Courts stood side by side un3l 1875 when Parliament enacted the Judicature Acts, merging the Common Law and Equity Courts. This Act also codified many of the Common Law Writs into causes of Ac3ons.
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Common Law v. Civil Law
• What are the pros of each? • What are the cons of each?
• How are rights protected in each? • What are the impacts on par3es who enter into contracts?
• Who does the common law favour?
Sources of Law
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Civil Law
Organized
Top down
Apply the Rule to the case
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Common Law
Disorderly
BoTom up
Develop Rule by solving the case
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Sources of Law
• Cons3tu3on • Common Law
• Statutory Provisions – State and Federal Law – Uniform Commercial Code – Statute of Frauds
Statutory Provisions
• State and Federal Contract Law – Consumer Protec3on
– Environmental Protec3on – Fraud – Labour Protec3ons
Statutory Provisions • State and Federal Contract Law
Statutory Provisions • State and Federal Contract Law
Statutory Provisions
• UCC (Uniform Commercial Code) – Established to harmonize contract law between the states
– Affects sales contracts primarily.
– Takes the analysis out of Common Law. Yet where silent, Common Law applies.
– Adopted in 49 states
Statutory Provisions
• Statute of Frauds-‐ Certain contracts MUST be reduced to wri3ng.
• Marriage. • Land. • Contracts that take longer than a year. • Executor • Surety
• IT IS RAISED AS A DEFENSE
Sources of Law
• Cons3tu3on • Common Law
• Statutory Provisions • Restatement of Law
Sources of Law
• Restatement of Law – American Law Ins3tute (group of lawyers)
– Restates development of Common Law – Black LeTer Law – Secondary source (not binding, yet persuasive) – hTp://lexinter.net/LOTWVers4/restatement_%28second%29_of_contracts.htm
What is a Contract? (1)
– Contract Forma3on
– Offer – Acceptance
What is a contract? • An Agreement between 2 or more par3es that generates rights and obliga3ons and is intended to have legally enforceable consequences.
• Agreement-‐ means a mee3ng of the minds consensus ad item-‐Mutual Assent
• The par3es agree about the same thing and intend for the agreement to be enforceable.
• Enforcement may be for damages or for performance.
Peerless Case • Raffles v. Wichelhaus (1864)
• P contracted to sell 125 bales of coTon to D. The goods were to be shipped from India to England, on the ship “Peerless”. Unknown to either party, there were two ships names “Peerless” carrying coTon one arriving in October and the other in December.
• D thought he had purchased the coTon arriving on the October ship, but P sent his coTon on December ship. D refused to accept delivery of the coTon arriving on the December ship and Raffles brought this lawsuit for breach of contract.
Peerless Case • Raffles v. Wichelhaus (1864)
• Restatement (Second) Sec3on 20(1): If the misunderstanding concerns a material term and neither party knows or has reason to know of the misunderstanding, there is no contract. Parol evidence is admissible to determine the meanings of terms when a latent ambiguity arises later.
Contract Forma3on
• Carbolic Smoke Ball Case (1892)
• Facts: • Controversy: • New Rule:
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Carbolic Smoke Ball
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Session II
• Is there a Contract? – Offer – Acceptance – Considera3on – Also
• Statute of Frauds • Parole Evidence Rule
Is there agreement?
• Offer v. Invita3on to Treat • Invita3on to treat-‐ an expression of a willingness to nego3ate.
• Shop window displays. • Adver3sement of price. • Auc3on offerings. • Invita3on for bids.
• Consumer protec3on Laws do however limit the above.
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• NO REPRESENTATION IS MADE THAT THIS FORM OF CONTRACT FOR THE SALE AND PURCHASE OF REAL ESTATE COMPLIES WITH SECTION 5-‐702 OF THE GENERAL OBLIGATIONS LAW ("PLAIN LANGUAGE"). THIS IS NOT A FORM CONTRACT. THIS CONTRACT IS NOT IDENTICAL TO FORMS PROMULGATED BY ANY ORGANIZATIONS, INCLUDING, BUT NOT LIMITED TO, THE NEW YORK STATE BAR ASSOCIATION. CONSULT YOUR LAWYER BEFORE SIGNING THIS AGREEMENT.
• • NOTE: FIRE AND CASUALTY LOSSES AND CONDEMNATION. • This contract does not provide for what may happen in the event of fire, or other casualty loss or condemna?on before the ?tle closing. Unless different provisions are made in this
contract, Sec?on 5-‐1311 of the General Obliga?ons Law will apply; part of that law makes a Purchaser responsible for fire and casualty loss upon taking possession of the Premises before the ?tle closing.
• • CONTRACT OF SALE • • CONTRACT OF SALE made as of NOVEMBER ____, 2011 , BETWEEN • • • Samir Gerkhan • • • • hereina_er called "Seller" and • • • Thom Becke • • • • hereina_er called "Purchaser". • • • The par?es hereby agree as follows: • • 1. Premises. Seller shall sell and convey and Purchaser shall purchase the property, together with all buildings and improvements thereon (collec3vely the "Premises"), more fully
described on a separate page marked "SCHEDULE A", annexed hereto and made a part hereof and also known as: • • Street Address: Autobahn polizei Barracks, • Fachbereich Rechtswissenscha_
54286 Trier • • Tax Map Designa3on: No. • • Together with Seller's ownership and rights, if any, to land lying in the bed of any street or highway, opened or proposed, adjoining the Premises to the center line thereof, including any
right of Seller to any unpaid award by reason of any taking by condemna3on and/or for any damage to the Premises by reason of change of grade of any street or highway. Seller shall deliver at no addi3onal cost to Purchaser, at closing (as hereina_er defined), or therea_er, on demand, any documents that Purchaser may reasonably require for the conveyance of such 3tle and the assignment and collec3on of such award or damages.
• • 2. Personal Property. Anything aTached to the real property, including the plumbing, hea3ng and ligh3ng fixtures, bathroom and kitchen cabinets, hot water heater, mantels, exis3ng
appliances, fixtures, screens, awnings, storm windows, storm doors and shrubbery, if present on the premises, are included in this sale. All appliances and items of personal property included in the sale are included in "AS IS" condi3on, with no express or implied warran3es of any kind. The following appliances are included in the sale:
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3. Purchase Price. 4. (a) The purchase price is: 1million Euros (b) The purchase price shall be paid by the Purchaser to the Seller as follows: The Purchaser shall pay the Seller the sum of: 100,000.00 Euros as and for a down payment upon the signing of this Contract (this includes $ paid to Broker), which shall be made payable to the order of "BALDWIN & BLOOMSTEIN, ATorney Trust Account" aTorney for the Seller, and shall be held in escrow pending closing of 3tle or default by the Purchaser. (c) The Purchaser shall, at the 3me of the closing, pay the Seller the sum of: 900,000.00 Euros being the balance of the purchase price, by cer3fied bank check or checks, or mortgage account closing checks, payable in accordance with the Sellers instruc3ons.
12. Condi3on of Property. (a) Purchaser acknowledges and represents that Purchaser is fully aware of the physical condi3on based on Purchaser's inspec3on and inves3ga3on thereof, and shall accept the same "AS IS" in their present condi3on and state of repair, subject to reasonable use, wear, tear and natural deteriora3on between the date hereof and the date of Closing (except as otherwise set forth in paragraph 16(d), without any reduc3on in the purchase price or claim of any kind for any change in such condi3on by reason thereof subsequent to the date of this contract. (b) PROPERTY CONDITION DISCLOSURE STATEMENT (PCDS) -‐ The Purchaser acknowledges that Purchaser has been furnished with a Property Condi3on Disclosure Statement prior to the execu3on of this Contract, and the Purchaser shall sign a copy of the PCDS in order to acknowledge receipt of this document prior to the execu3on of this Contract. Purchaser further acknowledges and agrees that maTers set forth in the PCDS are for informa3onal purposes only and do not in any manner effect or modify the terms of this Contract; in par3cular, but without limita3on, the "condi3on of property" which provides in part that the property is sold "AS IS" without any warran3es, guarantees or representa3ons by the Seller as to its condi3on. The Purchaser further expressly acknowledges and agrees that none of the maTers set forth in the PCDS shall survive the closing.
• 13. Title. Seller shall give and Purchaser shall accept such insurable 3tle as ANY TITLE INSURANCE COMPANY LICENSED TO DO BUSINESS IN THE STATE OF NEW YORK shall be willing to approve and insure in accordance with its standard form of 3tle policy, at standard premium rates, as approved by the New York State Insurance Department, subject only to the maTers provided for in this contract.
• • 14. Closing, Deed and Title. "Closing" means the seTlement of the obliga3ons of Seller and Purchaser to each
other under this contract, including the payment of the purchase price to Seller and the delivery to Purchaser of a BARGAIN AND SALE DEED WITH COVENANT AGAINST GRANTOR'S ACTS deed in proper statutory short form for recording, duly executed and acknowledged, so as to convey to Purchaser fee simple 3tle to the Premises, free of all encumbrances, except as otherwise herein stated. The deed shall contain a covenant by Seller as required by subd. 5 of Sec3on 13 of the Lien Law.
• • 15. Closing Date and Place. Closing shall take place on January 1, 2012, at the office of:
_________________________________, or as agreed upon by the aTorneys for the par3es. • • 16. Condi3ons to Closing. This contract and Purchaser's obliga3on to purchase the Premises are also subject to
and condi3oned upon the fulfillment of the following condi3ons precedent: • (a) The accuracy, as of the date of Closing, of the representa3ons and warran3es of Seller made in this contract. • (b) The delivery by Seller to Purchaser of a valid and subsis3ng Cer3ficate of Occupancy or other required
cer3ficate of compliance, or evidence that none was required, covering the building(s) and all of the other improvements located on the property authorizing their use as a ONE family dwelling at the date of Closing.
• (c) The delivery of the premises and all building(s) and improvements comprising a part thereof in broom clean condi3on, vacant and free of leases or tenancies, together with keys to the Premises.
• (d) All plumbing (including water supply and sep3c systems, if any), hea3ng and air condi3oning, if any, electrical and mechanical systems, equipment and machinery in the building(s) located on the property and all appliances which are included in this sale being in working order as of the date of Closing. This clause shall not be considered a warranty surviving closing.
• (e) If the Premises are a one or two family house, delivery by the par3es at closing of affidavits in compliance with state and local law requirements to the effect that there is installed in the Premises a smoke detec3ng alarm device(s) and carbon monoxide detector(s).
• (f) The delivery by the par3es of any other affidavits required as a condi3on of recording the deed. • (g) Subject to all easements, covenants, and restric3ons of record.
• 8. Mortgage Con3ngency. -‐ (a) The obliga3ons of Purchaser hereunder are condi3oned upon issuance on or before 25 December, 2011, (the "Commitment Date") of a wriTen commitment from any ins3tu3onal Lender pursuant to which such Ins3tu3onal Lender agrees to make a first mortgage loan, excluding VA, FHA or other governmentally insured loan, to Purchaser at Purchaser's sole cost and expense of $_________, or such lesser sum as Purchaser shall be willing to accept at prevailing rates of interest. Purchaser shall (i) make prompt applica3on to an ins3tu3onal Lender for such mortgage loan, (ii) furnish accurate and complete informa3on regarding Purchaser and members of Purchaser's family, as required, (iii) pay all fees, points and charges required in connec3on with such applica3on and loan, (iv) pursue such applica3on with diligence, (v) cooperate in good faith with such Lender to obtain such commitment and (vi) promptly give No3ce to Seller of the name and address of each Lender to which Purchaser has made applica3on. Purchaser shall comply with all requirements of such commitment and shall furnish Seller with a copy thereof promptly a_er receipt thereof.
• (b) If such commitment is not issued on or before the Commitment Date, then, unless Purchaser has accepted a commitment that does not comply with the requirements set forth above, Purchaser may cancel this contract by giving express and specific wriTen no3ce to Seller on the Commitment Date that Purchaser is canceling this contract, in which case this contract shall be deemed cancelled and therea_er neither party shall have any further rights against, or obliga3on or liabili3es to, the other by reason of this contract, except that the Down Payment shall be promptly refunded to Purchaser. The Purchaser shall, as a condi3on of any such cancella3on, furnish Seller with a wriTen statement from Lender seung forth the reason(s) a mortgage commitment was not issued. If Purchaser fails to give express and specific no3ce of cancella3on pursuant to and in accordance with this paragraph, or if Purchaser shall accept a commitment that does not comply with the terms set forth above, then Purchaser shall have waived Purchaser's right to cancel this contract and shall not be en3tled to receive a refund of the
• 10% deposit, or the down payment of whatever amount, by reason of the con3ngency contained in this sec3on. • • 9. PermiTed Excep3ons. The Premises are sold and shall be conveyed subject to: • (a) Zoning and subdivision laws and regula3ons, and landmark, historic or wetlands designa3on, provided that they
are not violated by the exis3ng buildings and improvements erected on the property or their use; • (b) Real estate taxes that are a lien, but are not yet due and payable. • •
10. Governmental Viola3ons and Orders. (a) Seller shall comply with all notes or no3ces of viola3ons of law or municipal ordinances, orders or requirements noted or issued on or before the closing date by any governmental department having authority as to lands, housing, buildings, fire, health, environmental and labor condi3ons affec3ng the Premises.
• 30. The premises sold are to be conveyed subject to the following addi3onal maTers: • (a) Any state of facts which an accurate survey might disclose provided the same do not render 3tle uninsurable. Purchaser agrees to take, subject to
minor survey varia3ons between fences, hedges, retaining walls and the record lines, provided said varia3ons are not so substan3al as to render 3tle uninsurable.
• (b) Any easements or rights of use created in favor of any public u3lity corpora3on for electricity, water, sewage, gas, telephone or other service over the property or to any street or avenue abuung the premises, or the right to use and maintain wires, cables and equipment upon or across the premises provided the same does not materially restrict the use of the premises or otherwise render 3tle uninsurable.
• (c) Covenants, easements and restric3ons of record provided the same do not render the 3tle uninsurable or prohibit the use of the premises as presently used and maintained; and any such restric3ons as may be contained in the SCHEDULE "A" legal descrip3on, if any.
• • 31. In the event that the check given by the Purchaser to the Seller on the signing of this contract shall not be honored for any reason by the bank on
which it is drawn Seller, in addi3on to any other available remedies, may cancel and terminate this contract without further no3ce. • • 32. Purchaser shall have the right to inspect the premises within twenty-‐four (24) hours prior to the closing, provided reasonable no3ce thereof is
given to the Seller. Purchaser shall no3fy seller of any problem disclosed by such inspec3on as soon as possible a_er discovery of the problem. • •
33. It is agreed that by the delivery and acceptance of the deed at the closing of 3tle, the liabili3es and responsibili3es of the Seller shall be deemed to have been fully complied with and all of the Seller's covenants under this contract to have been fully performed, except only as to those provisions which are expressly represented to survive the closing.
• • • This Agreement cons<tutes the en<re contract between the par<es hereto. The Seller is not liable or bound in any manner, by express or implied
warran<es, guarantees, promises, statements or representa<ons pertaining to said premises, the condi<on thereof or any other mager whatsoever, made or furnished by any real estate broker, agent, employee, servant or other person represen<ng or purpor<ng to represent the seller, unless such warran<es, guarantees, promises, statements or representa<ons are expressly or specifically set forth herein.
• • • IN WITNESS WHEREOF, this contract has been duly executed by the par3es hereto. • • • __________________________________________ _________________________________________ • SELLER PURCHASER • DATE: DATE: • • SOCIAL SECURITY NO.______________________ SOCIAL SECURITY NO.______________________ • •