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Contract Law
Jody BlankeProfessor of Computer Information Systems and Law
Contract Law As Private Law
Willing parties can agree to do most anything
Freedom of contract “Meeting of the minds”
Private Law Contract between Major League
Baseball and the Players Association - Collective Bargaining Agreement (241 page PDF file) “free agent” “salary cap” “luxury tax”
NHL (a league that used to play ice hockey in Canada and the U.S.)
Uniform Commercial Code Poster child of uniform laws Adopted in 49½ states Very successful Facilitates the ease of doing business First place to look for “the law”
then, other state statutes then, state case (common) law – safety
net
Basic Requirements
An agreement between the parties Consideration Capacity Legality
Agreement – The Offer Offeror must have intention to be bound by
offer e.g., kick the tire
Terms must be reasonably definite and certain can be written, oral or implied can come from prior dealings or usage of trade
Offer must be communicated to offeree e.g., reward for lost dog
Figurative “Death” of an Offer
“Natural causes” – lapse of time “Suicide” – revocation “Murder” – rejection
Counteroffer = rejection + offer “Execution” – by operation of law
change in law terminates offer
Literal Death of An Offer
The offeror dies The offeree dies Destruction of subject matter
Acceptance
At common law – “mirror image rule” UCC – more relaxed (and reasonable)
“battle of the forms” Generally effective upon receipt
exception – “mailbox rule”
Consideration
Each party must provide something of value Money, property, services, forebearance e.g., Hamer v. Sidway – the “rich uncle”
case e.g., Jennings v. KSCS
Courts will not examine the adequacy of the consideration
Capacity
Age – law protects minors Voidable contract Exception for necessaries
Mental competency Void contract Voidable contract
Intoxication
Legality
Contracts must have a legal purpose cannot take out a “contract” for that
noisy neighbor cannot purchase a gram of cocaine gambling?
e.g., Durado Beach Hotel v. Jernigan
Genuiness of Assent Duress – “gun to the head” Undue Influence Fraud Mistake
Unilateral – generally does not excuse performance exception – if nonmistaken party knew of the
mistake Mutual – generally does excuse performance
no meeting of the minds
Statute of Frauds
“An oral contract is as legally valid as a written contract unless the law requires it to be in writing”
“…as good as…” if executed before 100 clergy people of
all faiths willing to come to court and testify
Must Be In Writing Contract to transfer an interest in real
property Contract that cannot be performed within 1
year Contract to pay the debts of another Contract made in contemplation of marriage
dowry agreement prenuptial agreement
Contract for the sale of goods greater than $500 UCC drafters recommend increase to $5,000
Parol Evidence Rule
Court will not permit evidence of prior or contemporaneous oral statements if there is a complete written agreement exception – ambiguities
Morals of the story read the contract– get it in writing
Integration Clause
“I have read the above agreement and understand that it represents the entire agreement between the parties.”
Morals of the story read the contract– get it in writing
Standard Form Contracts
Read them Modify them
and get written approval from authorized representative
Use attachments if necessary e.g., letters, memos, specifications
Ambiguities interpreted against the drafter
Choice of Law/Forum
Written contracts often contain choice of law and choice of forum clauses
These will generally be enforced as long as there is a connection to the state
Some states may also require that the choices be fair
Covenants Not to Compete May be related to sale of business
e.g., Joe the Baker May be related to employment contract
California will not enforce such an agreement as an illegal restraint of trade
Georgia will not “blue pencil” an agreement Brenda Woods agrees not to work as an on-
air news anchor in the Atlanta/Athens television market for 6 months
Covenants Not to Compete
Scope agreement must specify what activity is
to be limited Geography
be careful of terms like Atlanta Duration
e.g., 6 months, 1 year, 2 years
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