Business Law and EthicsContract Law
“Contract Law: Selected Source Materials Annotated” by Steven J. Burton provides a comprehensive examination of key statutes, case laws, and principles that govern contract law. The 2021 edition intends to offer students, lawyers, and legal professionals a robust collection of annotations and insights into critical sections of contract law.
Introduction and Purpose
The book begins with an introduction to the purpose of contract law and the significance of having a solid grasp of legal sources. The focus is largely on aiding students and practitioners in understanding and applying real-world legal concepts through various annotated materials.
Contract Formation
Key Principles
Offer and Acceptance: Contract formation primarily centers around the interaction between offer and acceptance. For contract formation, both offer and acceptance need to be clear and unequivocal.
Consideration: Consideration refers to the value exchanged between parties. This could be in the form of money, services, or a promise not to do something.
Mutual Assent: Both parties must manifest an intention to be bound by the terms of the contract.
Example
Case Citation: Lucy v. Zehmer (1966)
Zehmer, in a seemingly joking manner, offered to sell his farm to Lucy for $50,000. Even though Zehmer believed it to be a joke, the court held the agreement as binding since an objective observer would deem Zehmer to have manifested a serious contractual intent.
Actions:
- Draft Precise Offers: Individuals should draft clear and explicit offers with no ambiguous terms.
- Seek Consideration: Ensure there is identifiable consideration before entering into an agreement.
- Manifest Clear Intent: Demonstrate explicit mutual assent through written or verbal agreements that leave no room for misunderstandings.
Statute of Frauds
Key Principles
The Statute of Frauds requires that certain types of contracts be in writing and signed by the parties to be enforceable. This typically includes contracts related to significant transactions (e.g., real estate deals, contracts that cannot be performed within one year).
Example
Case Citation: Radke v. Brenon (1940)
A dispute arose over an oral agreement concerning the sale of land. The court upheld the statute of frauds, declaring the agreement unenforceable due to lack of written documentation.
Actions:
- Get It in Writing: Always put agreements involving land or significant transactions in writing.
- Sign and Date Contracts: Ensure that all parties sign and date the final draft to confirm agreement and authenticity.
- Maintain Copies: Retain copies of all written contracts for future reference in case of disputes.
Parol Evidence Rule
Key Principles
The Parol Evidence Rule states that if a written contract is intended to be a complete and final representation of the parties’ agreement, no prior or contemporaneous outside statements or agreements can alter the terms of the written contract.
Example
Case Citation: Smalley v. Baker (2005)
The court disallowed the introduction of earlier oral agreements contradicted by the written contract, reinforcing the primacy of the written document.
Actions:
- Include All Terms: When drafting a contract, ensure all key terms are included in the document.
- Avoid Verbal Agreements: Limit reliance on external or verbal agreements not represented in the contract.
- Clarify Completeness: Indicate within the document itself that it is intended as a complete and exclusive statement of the terms.
Performance and Discharge
Key Principles
Performance and discharge discuss how contractual duties are fulfilled or excused. One party’s failure to perform as promised constitutes a breach of contract.
Example
Case Citation: Jacob & Youngs, Inc. v. Kent (1921)
The builder used a different brand of piping than specified. The court used the doctrine of substantial performance since the variance did not significantly affect the overall project.
Actions:
- Meet Specifications: Strive to meet all specified terms of the contract to avoid disputes.
- Document Performance: Keep detailed records and documentation showing compliance or performance of contractual duties.
- Address Deviations Promptly: Immediately communicate any necessary deviations from contract specifications and seek mutual consent.
Remedies for Breach
Key Principles
Remedies for breach may include damages (compensatory, punitive, nominal), specific performance, or restitution. The primary aim is to place the non-breaching party in the position they would have been in had the contract been performed.
Example
Case Citation: Hawkins v. McGee (1929)
In the “hairy hand” case, Hawkins was compensated for damages related to a failed surgical promise, focusing on the difference between the actual and promised outcomes.
Actions:
- Understand Damages: Familiarize yourself with different types of damages that can be sought in breach cases.
- Mitigate Losses: Take reasonable steps to mitigate any losses suffered due to the other party’s breach.
- Keep Evidence: Preserve all evidence related to the breach and resultant damages to support claims.
Defenses to Contract Enforcement
Key Principles
Common defenses include duress, undue influence, misrepresentation, mistake, incapacity, and illegality. Each defense can render a contract void or voidable.
Example
Case Citation: Williams v. Walker-Thomas Furniture Co. (1965)
The court ruled in favor of Williams, finding that the contract terms were unconscionable, showing a severe imbalance in bargaining power and unfair terms.
Actions:
- Evaluate Fairness: Ensure contract terms are fair and balanced between parties.
- Know Your Rights: Be aware of defenses like duress or misrepresentation if pressured into agreements.
- Seek Legal Advice: Where possible, seek legal counsel to evaluate contracts before signing.
Role of UCC
Key Principles
The Uniform Commercial Code (UCC) particularly Article 2, governs the sale of goods and offers standardized laws across different jurisdictions. The UCC provides provisions for offer and acceptance, performance, and breach among others in the context of the sale of goods.
Example
Case Citation: UCC §2-207, “Battle of the Forms”
This addresses conflicting terms in business exchange forms, allowing a contract to be formed despite differences between the offer and acceptance forms.
Actions:
- Learn the UCC: Familiarize yourself with relevant UCC provisions if dealing in the sale of goods.
- Standardize Forms: Use standardized forms for offers and acceptances to mitigate conflicts.
- Negotiate Terms: Actively manage and negotiate conflicting terms to ensure they reflect mutual interests.
Conclusion
Steven J. Burton’s “Contract Law: Selected Source Materials Annotated” is a crucial resource for comprehensive understanding and application in contract law. Through various annotated cases and legal principles, it provides actionable insights and steps for individuals to protect their interests and ensure enforceable and fair contractual agreements. By addressing the formation, enforcement, defenses, and remedies, this book serves as an indispensable guide for legal practitioners and students alike.