Week 1
 Sources of Contract Law
 Common Law
 Uniform Commercial Code
Contract
 Set of legally enforceable promises,
entered into by two or more parties,
to make their dealings predictable
and to allocate risk.
Contract Requirements
 To be enforceable, a contract must
meet certain requirements:
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Agreement
Consideration
Capacity
Legality
Types of Contracts:
Express or Implied
 Express contract: has its important
terms explicitly stated.
 Implied contract: implied from the
words and actions of the parties,
even if they never expressed an
agreement.
Types of Contract:
Unilateral or Bilateral
 Unilateral contract: contract formed
when one party acts in response to
other party’s promise
 Bilateral contract: contract in which
both parties make promises
Gifts
 A gift is a completed transfer of
property without consideration.
 A gift becomes irrevocable when:
 A donor with capacity
 has voluntarily made a transfer
 that has been accepted by the donee
Promissory Estoppel
 Promissory estoppel is a legal theory
for enforcing a promise if:
 The defendant knew the plaintiff would
rely on the promise
 The plaintiff did rely on the promise; and
 Enforcement is necessary to avoid
injustice
Quasi-Contract
 Quasi-contract is a theory for avoiding unjust
enrichment in situations in which a contract
did not actually form.
 Quasi-contract is a legal theory, based in
equity, for compensating a plaintiff if:
 Plaintiff gave some benefit to the defendant
 Plaintiff expected to be paid
 Defendant had knowledge of plaintiff’s actions and
expectations; and
 Defendant would be unjustly enriched if not
required to pay
Common Law
 Law from judicial decisions
 Governs contract disputes involving
real property, intangible property, and
services
Uniform Commercial Code
 Developed in response to the need for
a more modern, uniform body of law.
 Drafted to cover transactions that
often have roots in different states,
including the sale (and, in some
states, lease) of moveable items (also
called personal property, chattel, or
goods).
Uniform Commercial Code
 UCC covers transactions involving the
following:
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Negotiable instruments
Banking
Documents of title
Investment securities
Bulk sales
Letters of credit
Goods
 Goods include items with a physical
existence that are moveable at the
time of identification to the contract.
Good Faith
 The UCC definition of good faith: as
applied to merchant, means honesty
in fact and the observance of
reasonable commercial standards of
fair dealing in the trade.