CONTRACTS
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Introduction
Agreement
Consideration
Remedies
All with a splattering of legality,
capacity, consent, legal
requirements, & performance
Business Law and the Legal Environment
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CONTRACT
A PROMISSORY AGREEMENT
BETWEEN TWO OR MORE
PERSONS THAT CREATES,
MODIFIES, OR DESTROYS A
LEGAL RELATIONSHIP
Buffalo Pressed Steel Co. v Kirwan 138 Md. 60
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CONTRACT
AN AGREEMENT BETWEEN TWO OR
MORE PARTIES, PRELIMINARY STEP IN
MAKING OF WHICH IS OFFER BY ONE
AND ACCEPTANCE BY OTHER, IN
WHICH MINDS OF PARTIES MEET AND
CONCUR IN UNDERSTANDING OF
TERM.
Lee vs. Travelers Ins. Co. of Hartford, 173.S.C. 185
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CONTRACTS
Definition:
A promise that the
law will enforce.
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PURPOSE OF CONTRACTS
Contracts exist to
make business
matters more
predictable.
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JUDICIAL ACTIVISM
VS
JUDICIAL RESTRAINT
Judicial restraint makes the law less
flexible but more predictable.
Judicial activism makes the law more
flexible but less predictable.
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DEVELOPMENT OF CONTRACT
LAW
 Common law requirements:
 Later, some payment was required.
 Mutual promises became
enforceable.
 By the 1900’s, courts began to
consider fairness.
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ELEMENTS OF A CONTRACT
Agreement
Consideration
Legality
Capacity
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TYPES OF CONTRACTS
Bilateral
vs. Unilateral
Express
vs. Implied
Executory
Valid
vs.
vs. Executed
Unenforceable
vs. Voidable
vs.
Void
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TYPES OF CONTRACTS (cont’d)
Bilateral
Unilateral
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TYPES OF CONTRACTS (cont’d)
Express
Implied
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TYPES OF CONTRACTS (cont’d)
Executory
Executed
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TYPES OF CONTRACTS (cont’d)
Valid:
Unenforceable:
Voidable:
Void:
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PROMISSORY ESTOPPEL
Even when there is no
contract, a plaintiff may use
promissory estoppel to
enforce the defendant’s
promise.
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PROMISSORY ESTOPPEL
1. The defendant made a promise
knowing that the plaintiff would
likely rely on it.
2. The plaintiff did rely on the
promise; and
3. The only way to avoid injustice is
to enforce the promise.
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QUASI-CONTRACT
Even when there is no
contract, a court may
use quasi-contract to
compensate a plaintiff.
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REQUIREMENTS FOR QUASICONTRACT
1. Plaintiff gave some benefit to the
defendant.
2. Plaintiff reasonably expected to be
paid for the benefit and the defendant
knew this; and
3. The defendant would be unjustly
enriched if she did not pay.
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QUASI-CONTRACT DAMAGES
The damages awarded are
called quantum meruit.
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SOURCES OF CONTRACT LAW
Common Law
Uniform Commercial
Code
Restatement (Second) of
Contracts
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CONTRACTS
• ARE A PROMISE THE LAW
WILL ENFORCE.
• EXIST TO MAKE BUSINESS
MATTERS MORE PREDICTABLE.
Business Law and the Legal Environment
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