Understanding Contracts Or: 9 credit hours of law school in 30 minutes

Slides:



Advertisements
Similar presentations
Credit Instruments and Legal Documentation
Advertisements

1 Scope Scope of the UCC: to provide a uniform and consistent set of rules to deal with all phases of commercial sales transactions. Scope of Art. II of.
Consideration Chapter 8.
Sales Contracts.  Sale – Contract in which ownership of goods transfers immediately from the seller to the buyer  Ownership – Collection of rights that.
Section 13.2.
Sales 1. How and why sales contract differ from contracts made under common law. 2. How and under what circumstances Article 2 of the Uniform Commercial.
CONTRACTS. A contract is a: – Promise or set of promises, – And if someone breaches or breaks contract – You can sue and the law may provide remedy –
Prentice Hall © PowerPoint Slides to accompany THE LEGAL ENVIRONMENT OF BUSINESS AND ONLINE COMMERCE 5E, by Henry R. Cheeseman Chapter 13 Sales and.
Business Law and the Regulation of Business Chapter 51: Transfer and Control of Real Property By Richard A. Mann & Barry S. Roberts.
© 2007 Prentice Hall, Business Law, sixth edition, Henry R. Cheeseman Chapter 18: Formation of Sales and Lease Contracts Chapter 18: Formation of.
Comprehensive Volume, 18 th Edition Chapter 25: Nature and Form of Sales.
Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning Chapter 23 Nature and Form of Sales Contracts Twomey Jennings Anderson’s.
The UCC: Sales and Secured Transactions
CONTRACTS. A contract is a: – Promise or set of promises, – And if someone breaches or breaks contract – You can sue and the law may provide remedy –
Business Law and the Regulation of Business Chapter 12: Consideration
Consumer Law. Introduction Caveat emptor Consumer-Person who buys goods and services from a seller – Right to be correctly informed of quality, price.
Chapter 18 Formation of Sales and Lease Contracts
Essentials Of Business Law Chapter 14 Transfer Of Title McGraw-Hill/Irwin Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Chapter 17.  From chapter 17, we know that once the 5 essential elements are in place and the parties have agreed, a binding contract exists.  But how.
Legal Document Preparation Class 2Slide 1 Elements of a Contract to be Considered in Drafting The writing should clearly indicate the presence of an offer.
Business Law and the Regulation of Business Chapter 19: Introduction to Sales and Leases By Richard A. Mann & Barry S. Roberts.
Formation of Sales and Lease Contracts Chapter 19.
Law I Chapter 23: Contracts Chapter 24: Warranties.
Week 1  Sources of Contract Law  Common Law  Uniform Commercial Code.
Chapter 9: The Uniform Commercial Code
Real Estate Principles and Practices Chapter 6 Contracts and Business Law © 2014 OnCourse Learning.
Chapter 23 NATURE AND FORM OF SALES. 2Introduction Contracts for the sale of services and real estate are governed by the common law. Contracts for the.
© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. Twomey & Jennings BUSINESS LAW Chapter 22 Nature.
CHAPTER 16 FORMATION OF THE SALES CONTRACT & CONTRACTS FOR LEASING GOODS DAVIDSON, KNOWLES & FORSYTHE Business Law: Cases and Principles in the Legal Environment.
Copyright © 2004 by Prentice-Hall. All rights reserved. PowerPoint Slides to Accompany BUSINESS LAW E-Commerce and Digital Law International Law and Ethics.
CHAPTER 25 SECURED TRANSACTIONS: ATTACHMENT AND PERFECTION DAVIDSON, KNOWLES & FORSYTHE Business Law: Cases and Principles in the Legal Environment (8.
Chapter 9 Mutual Consideration. Consideration Main purpose of consideration is to distinguish between social promises and more serious transactions where.
1. 2 BUT FIRST SOME ADDITIONAL BUT IMPORTANT DEFINITIONS AND LEGAL CONCEPTS.
CONTRACTS IN SPORT AND PHYSICAL ACTIVITY Chapter 10.
COPYRIGHT © 2010 South-Western/Cengage Learning..
© 2007 West Legal Studies in Business, A Division of Thomson Learning Chapter 14 The Formation of Sales and Lease Contracts.
Chapter 13 Section 1 Bobbie K and Juan R. What is a Sale? The Uniform Commercial Code (UCC) governs sales of goods, also governs contracts to sell goods.
25-1 Chapter 18 Formation of Sales and Lease Contracts.
By Richard A. Mann & Barry S. Roberts
LAW for Business and Personal Use © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible.
Chapter 24 Nature and Forms of Sales Twomey, Business Law and the Regulatory Environment (14th Ed.)
Contract Law for Paralegals: Traditional and E-Contracts © 2009 Pearson Education, Upper Saddle River, NJ All rights reserved Formation of Sales.
Understanding Business and Personal Law The Sale and Lease of Goods Section 13.1 Contracts for the Sale of Goods Legal Terms sale (p. 268) price (p. 268)
Contracts STREET LAW CHAPTERS definition  An agreement between two or more persons to exchange something of value.
THE LEGAL ENVIRONMENT TODAY, 8E ROGER LEROY MILLER / FRANK B. CROSS © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated,
Unit 8 Contract Law. To Do List Read Chapter 7 in your textbook Review the website on business organizations Participate in the class Discussion Board.
Chapter 17 Formation of Sales and Lease Contracts.
Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. and the Legal Environment, 10 th edition by Richard.
Ch. 7 Consumer Law and Contracts 7-1 Sales Contracts.
Buying and Selling Real Property CHAPTER THIRTY-ONE.
Contracts Chapter 23. Kinds of Civil Law TortsContracts What binds individuals Laws of society, as defined by statutes and precedents Specific Agreements.
COMMERCIAL LAW.
CHAPTER 20 Introduction to Sales.
Contracts Within and Exceptions to the Statute of Frauds
Unit L UCC Professor Ludlum UCO Last updated Oct. 12, 2016
Introduction to Sales and Lease Contracts
Contracts That Must Be in Writing and E-Signatures
Chapter 12: Consideration
Chapter 9 Sales and Leases: Formation, Title and Risk
Chapter 18 Formation of Sales and Lease Contracts
Essentials of the legal environment today, 5e
Civil Law U.S. Government Chapter 15 Section 2.
Civil Law U.S. Government Chapter 15 Section 2.
UCC Sales and Lease Contracts and Warranties
WELCOME CONRACT LAW.
BUSINESS LAW TEXT AND CASES
Contracts in Real Estate Transactions
CHAPTER 9 Test review.
Presentation transcript:

Understanding Contracts Or: 9 credit hours of law school in 30 minutes Dr. Shannon L. Ferrell Associate Professor Department of Agricultural Economics

GET EVERYTHING IN WRITING Lawyer cliché time READ EVERYTHING GET EVERYTHING IN WRITING

What is a “contract?” An agreement between two or more parties consisting of a promise or set of promises which the law will enforce. Just remember, not all “agreements” are “contracts,” but a “contract” must first be an “agreement.”

…and why are they so important? They enable private parties to create legal obligations among themselves. Having a legal obligation then gives you a right to engage the legal system to enforce the obligation.

Is a handshake a contract?

The five elements of a contract Legally competent parties (Is it fair to hold the parties to it?) Proper subject matter (Is this something the law should enforce?) Offer Acceptance Consideration Was an agreement between two willing parties reached?

Now, food for thought… Two drunk farmers are in a bar talkin’ smack to each other. Drunk Farmer A, thinking to himself that Drunk Farmer B is too broke to do anything about it, writes “We hereby agree to sell to Farmer B the Ferguson Place complete for $50,000, title satisfactory to buyer.” Farmer B then tells Farmer A to get his wife to sign it, and she does. Farmer B then picks up the napkin, offers Farmer A $5 to seal the deal, and leaves the bar. Did Farmer B leave the bar with a binding contract to buy the Ferguson Place?

Back to that handshake thing The following types of contracts must be in writing and signed by the party against which enforcement is sought in order to be enforceable: Agreements that cannot be performed within one year of the making of the contract. A promise to answer for the debt, default, or miscarriage of another. “An agreement made upon consideration of marriage.” A contract for the sale of goods $500. Agreements involving an interest in land.

The Statute of Frauds: Agreements involving an interest in land. Covers a broad range of interests, including: The sale of real estate Leases (more than 1 year) Easements Restrictions on the property “Profits” from the land WHAT MATTERS IS THE TYPE OF INTEREST IN THE LAND, NOT THE AMOUNT OF PROPERTY INVOLVED!!! EXAM QUESTION

What goes into a contract? A lot of: thought what iffing discussion clarity and specificity

What goes into a contract? Full legal identifiers for the parties Definitions of all critical terms Description of what is at issue The property being exchanged The services being provided What’s NOT being done

What goes into a contract? What each party is Required to do Allowed to do Prohibited from doing Defining when the parties’ obligations start and end Defining payment If? When, where, how Calculation

What goes into a contract? Notices Emergency contacts Legal, written notices What constitutes a “material breach?” Right to cure Dispute resolution Negotiation Mediation Arbitration …required prior to litigation?

Sources of the Law Governing Contracts Uniform Commercial Code (UCC) - a set of “uniform laws” adopted by virtually all the states to harmonize the law applying to the most common types of transactions. This is why the UCC is important.

The Uniform Commercial Code Article 2 Deals with sale of “goods.” "Goods" means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale "Goods" also includes the unborn young of animals and growing crops

The implied warranty of merchantability UCC Article 2

The implied warranty of fitness for a particular purpose UCC Article 2

The Uniform Commercial Code Article 2A Deals with leases. Lease: “a transfer of the right to possession and use of goods for a term.”

The Uniform Commercial Code Article 7 Deals with “warehouse receipts,” “bills of lading,” and “other documents of title.” In other words – the rules governing transactions where you place your goods in the care of someone else. Grain elevators Feedlots Truckers

The Uniform Commercial Code Article 9 Deals with SECURED TRANSACTIONS What the heck is a secured transaction? A transaction where a debtor agrees to turn over possession of something in the event that the debtor defaults on their obligation. NOTE: While Article 9 applies to more than just goods (for example, it includes “intangible property”), it DOES NOT apply to real property – if the collateral is real property, then you have a MORTGAGE.

What happens if the contract is breached? We won’t allow punitive damages for breach of contract – damages in contracts cases are meant to compensate, not punish.

What happens if the contract is breached? Most common measure of damages in contracts is “expectation damages.” Definition: a sum that leaves an injured party in as good a position as full performance.

What happens if the contract is breached? Incidental damages: costs reasonably incurred in arranging a replacement deal (making phone calls, delivery fees, etc.)

What happens if the contract is breached? Consequential damages: special damages reasonably foreseeable by the breaching party at the time of the contract. LOTS of contracts will specifically exclude these damages.

What if we need to change something? If you want to make a modification: Minor: Strike out, write new provision, and have both parties initial. Major: Start over Have a separate document “rider,” “amendment,” or “exhibit” attached with reference. BOTH parties need to acknowledge

If I had to go into court and prove Prove there was a contract Prove what was required by it Prove that I did what was required Prove they did not do what was required … how would you do it?

GET EVERYTHING IN WRITING Don’t forget READ EVERYTHING GET EVERYTHING IN WRITING

Many thanks! Shannon L. Ferrell Oklahoma State University Dept. of Agricultural Economics shannon.l.ferrell@okstate.edu