Contract Law

Index

Videos

Tricks used to gain consent and joinder, ALL CAPS WORDS, Police harassment

Contracting your kids away through welfare

Public defender, serving notices at hearing, rescind vs. modify a contract

Who's contract is it?, and taking the courthouses back from the CROWN

Definition of "dare" in contract law

Why Are Contracts Necessary in Society?

Contract law can be any written agreement between two parties, whether they be individuals, companies, corporations, governments, nations, churches, cities, etc. Both parties must have authority to make the agreement. The agreement must be clear between parties. Today, most nations require they be in writing, but many nations honor verbal contracts in a court in which two witnesses can be provided. As a young man asks a girl for a date and she says “yes” to the movie that starts at 7:00 PM at the theatre on Thursday, the agreement is set. A contract is made. The six elements required:

1. Known address (first party)

2. Known address (second party)

3. The event (what is agreed)

4. Starting (starting date and time)

5. Ending (ending date and time)

6. Who pays (Consideration for the agreement)

This is a legal contract. The contract could be between museums, fair grounds, baseball games, etc. If the agreement is unclear to either party, there is no contract. For example, if your doctor tells you “find the medical benefits and risks for yourself”. Likely no doctor knows the real benefits and risks. This is not a contract. It is a “Con” to deceive. It proves how important contract knowledge really is.

Manual of Style for Contract Drafting, Third Edition, A - Adams, Kenneth A.pdf

Enforcement of the Constitution in court: “The Constitution is a contract in writing enforceable in a court of law pursuant to the statute of frauds, I’m asking for specific performance your Honor, in favor of me, the beneficiary of the contract.”

There’s a provision in the Constitution that no state can interfere with the obligation of a contract (including a verbal contract) . Article 1, sec 10

UCC 1-103.6 defines how contract law must be in compliance with the rules of the common law providing there is made a knowing reservation of common law rights.

The Code is complimentary to the Common Law, which remains in force, except where displaced by the code. A statute should be construed in harmony with the Common Law, unless there is a clear legislative intent to abrogate the Common Law." (UCC 1-103.6)

A basic premise in Contract Law: The contract shall be enforced most favorably in favor of the non-preparer.

D. I. Y. Do NOT Argue the Terms of the Contract 010517.pdf

Uniform Commercial Code “UCC” Contracts Vs. Common Law Contracts

Contracts law principles in general are uniformly understood and applied across the United States. Contract law is governed by the common law and the Uniform Commercial Code "UCC."

Common law governs contractual transactions with real estate, services, insurance, intangible assets and employment. UCC governs contractual transactions with goods and tangible objects (such as a purchase of a car).

The Common Law and UCC have their distinct differences and it is vital to know and understand them if you are in a position where you contractually transact often.

The following are some important aspects of the common law and UCC. This is by far not an exhaustive list of information about each code of law – but a great educational start! It is highly advised that you see a licensed Attorney or better yet, someone who is NOT an attorney but well versed in the law if you have any specific questions regarding contracts that you are unsure of or cannot make sense of.

All contracts MUST be entered into knowingly, willingly, and intentionally by both party. Neither party can be coerced. It also has to be under full disclosure. None of the contracts entered into with the government by which you might lose your sovereignty are willing, intentional, or knowing, and often there is not full disclosure.

If someone claims you are party to a contract say, “Ok, show me my autograph on a contract where I knowingly, willingly, and intentionally agreed to the terms of the contract under full disclosure.”

Definitions of words have been changed many times, find out what dictionary was used to define the words in the contract and make sure you know what they mean. Or put a “mini dictionary” into the document for the terms used. A lot of people like using the Webster’s 1828 dictionary. Its the closest to the 1776 time frame and is a general purpose dictionary. Or use Bouvier’s Law Dictionary (which is what Congress decided to use). With Black’s Law, stick with the 4th edition because after that they started making significant changes in definitions to their advantage.

Acceptance of an Offer With Different Terms

The common law dictates that any change to an offer is a rejection and counter offer (this creates a new offer and changes the person who was initially the offeree to the offeror). A change to an offer with UCC may still form a binding contract depending on the circumstances surrounding the transaction and the substance of the differing term (whether it was a major deviation or a minor one).

Contract Modification

Modification of contracts with the common law requires consideration, unlike the UCC, where consideration is not a prerequisite.

Promise to Keep an Offer Open

A promise to keep a deal open is an option contract with the common law and requires consideration. UCC calls this a firm offer and requires writing. The UCC also requires that the offer be made by a merchant as opposed to just having consideration to support the offer.

Time to Sue (Statute of Limitations)

The time to sue on a contract varies by state and is usually different for oral vs. written contracts.

Terms

The common law requires a description on the quantity, price, performance time, nature of work and identity of an offer to be part of a valid contract. UCC only specifies that quantity is a must have term in its contracts.

The basic elements required for the agreement to be a legally enforceable contract are: mutual assent, expressed by a valid offer and acceptance; adequate _consideration;_ capacity; and legality. In some states, element of consideration can be satisfied by a valid substitute. Possible remedies for breach of contract include general damages, consequential damages, reliance damages, and specific performance.

Overview

Contracts are promises that the law will enforce. Contract law is generally governed by the state Common Law, and while general overall contract law is common throughout the country, some specific court interpretations of a particular element of the Contract may vary between the states.

If a promise is breached, the law provides remedies to the harmed party, often in form of monetary damages, or in limited circumstances, in the form of specific performance of the promise made.

Elements -- Consideration and Mutual Assent

Contracts arise when a duty comes into existence, because of a promise made by one of the parties. To be legally binding as a contract, a promise must be exchanged for adequate consideration. There are two different theories or definitions of consideration: Bargain Theory of Consideration and Benefit-Detriment theory of consideration.

1) Under the _Benefit-Detriment theory_, an adequate consideration exists only when a promise made to the benefit of the promisor or to the detriment of the promisee, which reasonably and fairly induces the promisor to make a promise for something else for the promisee. For example, promises that are purely gifts are not considered enforceable because the personal satisfaction the grantor of the promise may receive from the act of generosity is normally not considered sufficient detriment to constitute adequate consideration.

2) Under _Bargain-for-Exchange theory _of consideration, adequate consideration exists when a promisor makes a promise in return for something else. Here, the essential condition is that the promisor was given something specifically to induce the promise being made. In other words, the Bargain for Exchange theory is different from the detriment-benefit theory in that the focus in bargain for exchange theory seems to be the parties’ motive for making the promises and the parties’ subjective mutual assent, while in detriment benefit theory, the focus seems to be an objective legal detriment or benefit to the parties.

Governing Laws

Contracts are mainly governed by state statutory and common (judge-made) law and private law (i.e. the private agreement). Private law principally includes the terms of the agreement between the parties who are exchanging promises. This private law may override many of the rules otherwise established by state law. Statutory law, such as the Statute of Fraud, may require some kinds of contracts be put in writing and executed with particular formalities, for the contract to be enforceable. Otherwise, the parties may enter into a binding agreement without signing a formal written document. For example, Virginia Supreme Court has held in _Lucy v. Zehmer_ that even an agreement made on a piece of napkin can be considered a valid contract, if the parties were both sane, and showed mutual assent and consideration.

Most of the principles of the common law of contracts are outlined in the Restatement of the Law Second, Contracts, published by the American Law Institute. The Uniform Commercial Code, whose original articles have been adopted in nearly every state, represents a body of statutory law that governs important categories of contracts. The main articles that deal with the law of contracts are Article 1 (General Provisions) and Article 2 (Sales). Sections of Article 9 (Secured Transactions) govern contracts assigning the rights to payment in security interest agreements. Contracts related to particular activities or business sectors may be highly regulated by state and/or federal law. See Law Relating To Other Topics Dealing with Particular Activities or Business Sectors. In 1988, the United States joined the United Nations Convention on Contracts for the International Sale of Goods which now governs contracts within its scope.

Remedies for Breach of Contract -- Damages

If the agreement does not meet the legal requirements to be considered a valid contract, the “contractual agreement” will not be enforced by the law, and the breaching party will not need to indemnify the non-breaching party. That is, the plaintiff (non-breaching party) in a contractual dispute suing the breaching party may only win Expectation Damageswhen they are able to show that the alleged contractual agreement actually existed and was a valid and enforceable contract. In such case, expectation damages will be rewarded, which attempts to make the non-breaching party whole, by awarding the amount of money that the party would have made had there not been a breach in the agreement plus any reasonably foreseeable consequential damages suffered as a result of the breach. However, it is important to note that there is no punitive damages for contractual remedies, and the non-breaching party may not be awarded more than the expectancy (monetary value of the contract, had it been fully performed).

However, in certain circumstances, certain promises that are not considered contracts may be enforced to a limited extent. If one party has made reasonable reliance to his detriment on the assurances/promises of the other party, the court may apply an equitable doctrine of Promissory Estoppel to award the non-breaching party a Reliance damagesto compensate the party for the amount suffered as a result of the party’s reasonable reliance on the agreement.

In another circumstance, the court may award Unjust Enrichment to a party, if the party who confers a benefit on another party, if it would be unjust for the party receiving the benefit to keep it without paying for it.

Finally, one modern concern that has risen in the contract law is the increasing use of a special type of contract known as "Contracts of Adhesion" or form-contracts. This type of contract may be beneficial for some parties, because of the convenience and the ability by the strong party in a case to force the terms of the contract to a weaker party. Examples include mortgage agreements, lease agreements, online purchase or sign-up agreements, etc. In some cases, courts look at these adhesion contracts with a special scrutiny due to the possibility of unequal bargaining power, unfairness, and unconscionability.