Contract Law Jody Blanke, Professor Computer Information Systems and Law Mercer University, Atlanta

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 (311 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”

Bilateral and Unilateral Contracts Bilateral – a promise for a promise e.g., Joe promises to paint Bill’s house and Bill promises to pay Joe $1000 Unilateral – a promise for an act e.g., Susan promises to pay $500 to the first person who scales the outside of the Business and Education Building performance of the act is acceptance

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 Mental competency Intoxication Voidable contract Exception for necessaries Mental competency Void 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 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

Third-Party Rights Each party receives certain rights or benefits in a contract Each party undertakes certain duties or obligations Generally, rights can be assigned to third parties Generally, duties can be delegated to third parties exception – when performance depends upon personal skills

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