Contacts Outline pdf PDF

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Contracts Outline! I.

Contracts Generally- What does it mean to “enforce” a promise?

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A contract is a legally enforceable exchange of promises between two or more parties." !

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1. Result of Voluntary exchange= creates wealth! " a. Gain in efficiency or decrease in price=gain in wealth! " b. Pareto efficiency= set of exchanges that increases wealth of both (no loses)! " c. Kaldo-Hicks efficient outcome= One person is better off and other is worst-" " " " victim!

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2. Need contract law to get people to live up to their bargains, when facts change. !

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3. Ultimate goal of contact law; prevent people form breaking promises, welfare " " " maximum & rights of duties/ moral duties. !

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4. What does it mean to “enforce” a promise? " a. To protect the victims economic expectations! " b. To win a preliminary injunction you must prove (as the plaintiff) that you will " " " " win in trial.!

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U.S. Naval Institute v. Charter Communications, Inc- (paperback book case) ! - No punitive damages for breach of contract ! - damages measured by previous months sales difference ! - Breach of contract is efficient but NOT Pareto-efficient- there is a victim. ! -Net efficiency both parties are better off financially but there is a victim.

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II. 3 Principal Bases of Liability Related to the making of promises A. Contract Formation [Offer, Acceptance, Consideration] " " " !

Bilateral - Contract generally forms if one party makes an offer, and another party " " accepts the offer by manifesting assent to the offer’s terms, provided there is adequate "" consideration. (most contracts are bilateral, both parties at moment of acceptance owe !! some form of duty)

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Unilateral - Contract exists if one parts makes and offer, and the other parts accepts by "" simply preforming. ! 1. Mutual Assent & Objective Test

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A. Contract duties are duties you create for yourself via Assent- voluntary agreed " to be bound by this duty. !

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B. Mutual Assent = meeting of the minds !

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C. Test for Legal Assent : (Objective test) say and do what you mean. (does not " " " include mental assent). ! " ! " - Based on actions NOT thoughts!

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- Specific Performance ! - Certain level or intoxication negates your ability to ascent! - Must put yourself in the reasonable position of the promisee (what did " " " the promisee believe? If actions and words indicate that the " " " promisor intended to be bound then there is mutual assent (a " " " reasonable belief). ! - unless promisor outright says he is joking unlike in Lucy v. Zehmer (he " " " whispered jokingly to his wife, not the promisee.)!

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Objectivist have an interest in protecting the promisee. Base assent not ! ! on what the promisor intends but what the promisor conveys. Relies on ! ! the concrete facts , would be impossible to know what the promisor ! ! “meant”....