Tuesday, 16 July 2013

contract


contract is a promissory agreement that is legally enforceable. However, some contracts are unenforceable or voidable under certain circumstances, and others can be formed without an actual agreement (e.g., quasi-contracts).Kinds Of Contracts


A. Express

An express contract is formed by written or oral language.

B. Implied in Fact

An implied-in-fact contract is manifested by the actions of the parties, although it is not explicitly written or stated. Example: plunking down 50 cents at a newsstand and taking a paper.

C. Implied in Law (quasi-contract)

A quasi-contract is a recovery or obligation that is not created by an actual agreement, but by the law for “reasons of justice.” It is not an actual contract negotiated by the parties. Example: A plumber walks by a home and fixes a burst pipe that was flooding the basement while the homeowner was absent. The plumber may be able to recover in quasi-contract, notwithstanding the absence of an actual agreement with the owner to perform the service and receive compensation.

D. Unilateral-Bilateral Distinction

1. Bilateral Contract 
A bilateral contract is formed by mutual exchange of promises by the contracting parties. Example: A promises B that he will sell B ten baseball cards, and B promises to pay A one dollar.
2. Unilateral Contract 
A unilateral contract is one in which a promise is made in exchange for actual performance, as opposed to a promise to perform.
Example: A promises to pay B $100 if B paints A’s home. A has not asked B for a promise to paint, but rather to actually paint.
3. Distinction Between Unilateral and Bilateral
Contracts The difference between unilateral and bilateral contracts is not as important today as in the past. However, one significant difference is the extent of the obligations they impose. Once parties exchange promises in bilateral contracts, they are obligated to perform their promises. In a unilateral contract, the nonpromising party is not obligated to perform and the promisor’s obligation does not arise until the requested act is completed.

Validity Of Contracts


A. Enforceable

An enforceable contract is a normal contract that has legal effect.

B. Void

A void contract has no legal effect. Example: a contract to commit crime.

C. Voidable

A voidable contract has legal effect unless one party (e.g., a minor) chooses to void it.

D. Unenforceable

An unenforceable contract is one that has some legal status but no conventional means for a party to assert his rights. Example: The statute of limitations precludes a party from bringing an action in court after a specified time period has elapsed. While corrective measures cannot make a void contract enforceable, an unenforceable contract can sometimes be validated by corrective action of the parties (e.g., memorializing an agreement in writing to satisfy the Statute of Frauds).

Sources Of Law

A. Common Law

Contract law has traditionally been governed by common law (case law), although many important areas have been superseded by statute in recent years.

B. Uniform Commercial Code

All states except Louisiana have largely adopted the provisions of the Uniform Commercial Code (UCC), which governs many aspects of various commercial transactions. Article 2, which governs sales, is the section of primary importance to basic contracts courses.

C. Restatements

A persuasive but not binding source of contract law is the Second Restatement of Contracts of 1980, which replaced the 1932 Restatement of Contracts. It is an annotated summary of common law by the American Law Institute. However, the law in a given jurisdiction is not necessarily that propounded by the Restatement.

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