UCSD—Contract Law Jack Friery Contract Law UCSD Extension © 2010 Jack Friery, Esq. 1.

UCSD—Contract LawJack FrieryContract LawUCSD Extension

© 2010Jack Friery, Esq.

1

Course Overview

•Objective▫Practical knowledge of contract elements▫Recognition of contract issues

•Approach▫Analyze contract law principles▫Examine the elements of a contract▫Do team and individual practical exercises


2

Contract Overview

•What’s a “Contract”?▫Risk allocation?▫Express?▫Implied?▫Enforceable?▫Void or voidable?


3

Overview (con’t)

•Contract types•Express or implied?•Written or oral?•“Quasi-contracts”


4

Overview (con’t)

•Elements of valid contract▫Offer▫Acceptance▫Consideration▫Lawful purpose▫Competent parties


5

Offer

•Defined▫Offeror proposes▫Offeree disposes

•Elements▫Intent/jokes▫Communication▫Definiteness


6

Offer (con’t)

•Essential terms:▫Price ▫Subject matter▫Parties▫Time of performance


7

Offer (con’t)

•Communication to offerees•Are ads offers?•Revocation of offers•Expiration of offers


8

Acceptance

•Defined▫Legal manifestation of assent▫Saying “yes” the right way

•Mirror image rule▫Common law rule▫Clarifications


9

Acceptance (con’t)

•Identity of offeree▫Offers to a group

•Bilateral or unilateral contract?▫Act or promise?▫Who decides?▫Significance: when contract arises

•Counteroffers▫Common law▫UCC


10

Acceptance (con’t)

•How to accept▫Conduct▫Words

•Mailbox rule▫Acceptance effective when mailed?

•Silence as acceptance▫Common law


11

Consideration

•Defined•Contracts vs. gifts•Mutuality

▫Benefit?▫Detriment?


12

Consideration (con’t)

•Past consideration •Moral consideration•Illusory promises•Preexisting duties•Is the consideration sufficient?

▫One dollar


13

Consideration (con’t)

•Contract modifications▫New consideration needed?

•Accord & satisfaction▫Good-faith disputes


14

Legality & Capacity

•Capacity▫Age

Necessaries▫Mental capacity

Temporary Declared incompetence

▫Intoxication▫Does other party have to be aware?


15

Legality & Capacity (con’t)

•Legality:▫Inherently illegal▫Technically illegal▫Severability clause

•Voidability


16

Contractual Intent

•Intent defined: subjective or objective?•How would a reasonable person view

these facts and circumstances?


17

Mistake

•Mistake▫Unilateral

Examples Remedy? (limited)

▫Bilateral (mutual) Rescission Reformation


18

Fraud & Duress

•Fraud & misrepresentation▫Negligent misrepresentation vs. active

fraud•Duress

▫Physical▫Economic▫Psychological/mental▫Form contracts: enforceable?


19

Writings

•Statute of Frauds: do you need a writing?▫Real property ▫Goods >$500▫Marriage▫One-year rule

Lifetime contract?•Part performance—the panacea (cure-all)


20

Writings (con’t)

•What’s a “writing”?▫Cocktail napkin?▫Series of incomplete writings?▫Emails?

•Parol evidence rule▫Conflicting verbal and written deals


21

Third Parties

•Assignment▫Rights

•Delegation▫Duties

•Contract novation—switching a party


22

Enforcement by a Third Party

•Third party beneficiaries•Mentioned in contract?•Differing status—can a 3rd party sue

either party to the contract?▫Creditor▫Donee


23

Contract Conditions

•Covenants vs. conditions•Covenant=promise

▫Every contract contains a covenant•Conditions

▫Examples: insurance policy; alimony agreement

▫Can initiate or kill a duty


24

Contract Conditions(con’t)

•Conditions▫Precedent▫Subsequent▫Concurrent▫Implied-in-fact▫Implied-in-law


25

Performance & Discharge of Obligations•Effect of performance•Performance/breach

▫Material breach▫Minor breach▫“Punch list” items

•Rescission by the parties


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Discharge of Obligations (con’t)•Conditions: met or missed•Failure to cooperate•Anticipatory repudiation

▫Saying “no” before your time comes▫Test: unequivocal statement


27

Discharge of Obligations (con’t)

•Insolvency▫Bankruptcy—is the contract over, or is it

still being performed? Executory contracts Executed contracts


28

Discharge of Obligations (con’t)•Impossibility

▫Objective impossibility▫Commercial impracticability▫Role of Force Majeure

•Death of party•Destruction of subject matter

▫Failure of consideration


29

Breach, Damages & Remedies

•Compensatory damages▫“Make whole” damages

Buyer—”cover” Seller—lost profits

•Incidental damages▫Expenses

•Consequential damages▫Test: foreseeabilty


30

Remedies (con’t)•Liquidated damages

▫Rules for imposing▫Can’t be penal

•Caps on damages▫Limitation of damages▫Third-party liability

•Specific performance•Punitive damages for breach?


31

E-Contracts

•Electronic contracts▫Email?

•Electronic signatures--Federal E-SIGN Act▫Defined▫Effect


32

UCC

•Article 2: Sale of goods▫Applicability

Dollar amount? Merchant or not?

▫What are “goods”?•Article 2A: Leases of goods•CISG: International sales of goods


33

UCC (con’t)

•General principles▫Merchant or non-merchant?▫Good faith & fair dealing▫Course of dealing▫Trade usage & custom


34

UCC (con’t)

•Offer/acceptance/consideration▫Relaxed rules/commercial reality

•Battle of the forms: new and different terms in the acceptance▫Merchants▫Non-merchants


35

UCC (con’t)

•Writing requirement▫Rule▫Exceptions

•Effect of missing terms▫Fill-in-the-blanks rules


36

UCC (con’t)

•Warranties▫Express

Samples/models/catalog▫Implied

Merchantability (Hong v. Marriott) Fitness for a particular purpose


37

UCC (con’t)

•Shipment terms▫Risk of loss▫Role of insurance

•Written request for adequate assurances


38

UCC (con’t)

•Performance•Breach•Damages

▫Buyer▫Seller

•Statute of limitations


39

ConclusionQuestions?


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UCSD—Contract Law Jack Friery Contract Law UCSD Extension © 2010 Jack Friery, Esq. 1.

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