1. Introduction to Contracts

2. JOIN KHALID AZIZ ECONOMICS OF ICMAP, ICAP, MA-ECONOMICS, B.COM. FINANCIAL ACCOUNTING OF ICMAP STAGE 1,3,4 ICAP MODULE B, B.COM, BBA, MBA & PIPFA. COST ACCOUNTING OF ICMAP STAGE 2,3 ICAP MODULE D, BBA, MBA & PIPFA. CONTACT: 0322-3385752 0312-2302870 R-1173,ALNOOR SOCIETY, BLOCK 19,F.B.AREA, KARACHI, PAKISTAN

3. Topics Covered in this Chapter A. Development of the Law of Contracts B. Definition of a Contract C. Requirements of a Contract D. Classification of Contracts E. Promissory Estoppel F. Quasi Contracts

4. Law of Contracts Definition of Contract – a binding agreement that the courts will enforce. Common Law – most contracts are governed primarily by State common law, including contracts involving employment, services, insurance, real property (land and anything attached to it), patents, and copyrights.

5. Law Governing Contracts Specific provision of UCC applicable? Sale of goods? General contract law governs UCC governs No Yes

6. Uniform Commercial Code Article 2 of the UCC governs the sales of goods. Sale – the transfer of title from seller to buyer. Goods – tangible personal property (personal property is all property other than an interest in land).

7. Requirements of a Contract Mutual Assent – the parties to a contract must manifest by words or conduct that they have agreed to enter into a contract. Consideration – each party to a contract must intentionally exchange a legal benefit or incur a legal detriment as an inducement to the other party to make a return exchange. Legality of Object – the purpose of a contract must not be criminal, tortious, or otherwise against public policy. Capacity – the parties to a contract must have contractual capacity.

8. Validity of Agreements Void Void or Voidable No Valid Contract Unenforceable Yes No Mutual Assent? Consideration? Capacity? Free from Invalidating Conduct? Yes No Subject Matter Legal? Statutes of Frauds Satisfied? Yes No

9. Classification of Contracts Express and Implied Contracts  Express Contract – an agreement that is stated in words, either orally or in writing.  Implied in Fact Contract – a contract in which the agreement of the parties is inferred from their conduct. Bilateral and Unilateral Contracts  Bilateral Contract – a contract in which both parties exchange promises.  Unilateral Contract – a contract in which only one party makes a promise.

10. Classification of Contracts Valid, Void, Voidable, and Unenforceable Contracts  Valid Contract – one that meets all of the requirements of a binding contract.  Void Contract – no contract at all; without legal effect.  Voidable Contract – a contract capable of being made void.  Unenforceable Contract – a contract for the breach of which the law provides no remedy.

11. Classification of Contracts Executed and Executory Contracts  Executed Contract – a contract that has been fully performed by all of the parties.  Executory Contract – a contract that has yet to be fully performed. Formal and Informal Contracts  Formal Contract – an agreement that is legally binding because of its particular form or mode of expression.  Informal Contracts – all contracts other than formal contracts.

12. Contractual and Noncontractual Promises All Promises Non- contractual promises (non- enforceable) Contractual promises (enforceable) Enforceable non- contractual promises

13. Promissory Estoppel Definition – a doctrine enforcing some noncontractual promises. Requirements – a promise made under circumstances that should lead the promisor reasonably to expect that the promise would induce the promisee to take definite and substantial action, and the promisee does take such action. Remedy – a court will enforce the promise to the extent necessary to avoid injustice.

14. Quasi Contracts Definition – an obligation not based on contract that is imposed to avoid injustice. Requirements – a court will impose a quasi contract when (1)­the plaintiff confers a benefit upon the defendant, (2)­the defendant knows or appreciates the benefit, and (3)­the defendant's retention of the benefit is inequitable. Remedy – the plaintiff recovers the reasonable value of the benefit she conferred upon the defendant.

15. Contracts, Promissory Estoppel, and Quasi Contracts

16. JOIN KHALID AZIZ ECONOMICS OF ICMAP, ICAP, MA-ECONOMICS, B.COM. FINANCIAL ACCOUNTING OF ICMAP STAGE 1,3,4 ICAP MODULE B, B.COM, BBA, MBA & PIPFA. COST ACCOUNTING OF ICMAP STAGE 2,3 ICAP MODULE D, BBA, MBA & PIPFA. CONTACT: 0322-3385752 0312-2302870 R-1173,ALNOOR SOCIETY, BLOCK 19,F.B.AREA, KARACHI, PAKISTAN