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Contracts Treatise
Table of Contents
Contracts Outline
Introduction and Definitions
Contract law in the United States
Contract formation
Intention to Bind
Formal requisites
Mailbox rule
Mirror image rule
Invitation to deal
Firm offer
Collateral contract
Uniform Commercial Code
Uniform Commercial Code
Course of dealing
Course of performance
UCC-1 financing statement
Uniform Commercial Code adoption
Defenses against formation
Lack of capacity
Undue influence
Illusory promise
Statute of frauds
Non est factum
Contract interpretation
Governing law
Construction and Operation
Parol evidence rule
Contract of adhesion
Integration clause
Contra proferentem
Excuses for non-performance
Frustration of purpose
Unclean hands
Accord and satisfaction
Rights of third parties
Privity of contract
Third-party beneficiary
Performance or Breach
Necessity of performance
Sufficiency of performance
Anticipatory repudiation
Exclusion clause
Efficient breach
Fundamental breach
Termination and rescission
Abrogation and rescission
Subsequent contract
Specific performance
Liquidated damages
Punitive damages
Quasi-contractual obligations
Quantum meruit
Actions in General
Parties to Action
Questions of Law and Fact
Trial and Judgment

Introduction to Contracts[edit | edit source]

What is a Contract?[edit | edit source]

A contract is "an agreement which creates an obligation."[1] A contract's essential elements are:

  1. Parties competent to contract.
  2. A subject matter.
  3. A legal consideration.
  4. Mutuality of agreement.
  5. Mutuality of obligation.

When one or more of these five elements are missing, the contract is unenforceable (in some cases), voidable (in other cases) and void (in others).

A contract then is the result of agreement and obligation; by agreement being meant the expression by two or more persons of a common intention; by obligation being meant the duty which the law imposes upon the parties to act as they have agreed to act. And this obligation is not present unless the agreement contains the requisites just mentioned.

A contract may therefore be defined as the agreement of two or more competent persons, in proper form, on a legal consideration and with their free consent upon a legal subject matter.[2]

Other Common Law Definitions[edit | edit source]

  1. "A contract may be defined as an agreement between competent parties, supported by a legal consideration, and In the form, If any, prescribed by law, creating an obligation on the part of one or both to do or refrain from doing some lawful thing."[3]
  2. "The agreement of two competent parties about a legal and competent subject matter, upon a mutual legal consideration, with a mutuality of obligation." [4]
  3. "An agreement upon sufficient consideration. to do or not to do a particular thing." [5]
  4. "A voluntary and lawful agreement, by competent parties, for a good consideration, to do or not do a. specified thing."[6]
  5. "The agreement of minds, upon a sufficient consideration, that something specified shall be done, or shall not be done."[7]
  6. "The meeting of minds upon and agreement to a definite thing."[8]
  7. "A bargain or agreement voluntarily made upon good consideration, between two or more persons capable of contracting, to do, or forbear to do, some lawful act."[9]
  8. "An agreement between two or more parties, for the doing or the not doing or some particular thing."[10]
  9. "A deliberate engagement between competent parties, upon a legal consideration, to do or to abstain from doing some act."[11]
  10. "A promise from one or more persons to another or others, either made in fact or created by the law, to do or refrain from some lawful thing; being also under the seal of the promisor, or being reduced to a judicial record, or being accompanied by a valid consideration, or being executed, and not being in a form forbidden or declared inadequate by law."[12]
  11. "An agreement enforceable at law, made between two or more persons, by which rights are acquired by one or more to acts or forebearances on the part of the other or others."[13]
  12. An agreement by which two parties mutually promise and engage, or one of them promises or engages to the other, to give some particular thing or to do or abstain from doing some particular act.[14]
  13. An agreement containing a promise made by the one party for a valid consideration and agreed to by the other party.[15]
  14. "Every agreement and promise enforceable by law."[16]
  15. "A mutual assent of two or more persons, competent to contract, founded on a sufficient and legal motive, inducement, or consideration to perform some legal act, or to omit to do anything, the performance whereof is not enjoined by law."[17]
  16. "An obligation attached by the mere force of law to certain acts of the parties, usually words, which ordinarily accompany and represent a known Intent."[18]
  17. "A transaction between two or more persons, In which each party comes under an obligation to the other, and each reciprocally acquires a right to what is promised by the other."[19]
  18. "An agreement where both parties become obligated."[20]
  19. "A voluntary agreement between two parties, the coming together of two minds by a common intent."[21]
  20. "An agreement between competent parties, supported by a legal consideration, and there can be no contract in its true sense without a meeting of minds."[22]
  21. "The union of two or more minds in a thing done or to be done."[23]
  22. "The meeting of the minds of the contracting parties."[24]
  23. "A drawing together of minds until they meet."[25]
  24. "A writing is not a contract when it fails to express that on which the minds of the parties met, and courts freely exercise power to correct mistakes when the proof leaves no doubt that the real contract was something else."[26]
  25. "A proposition made by one contracting party and accepted by the other constitutes a contract. It evidences the meeting of their minds upon the terms of their agreement, and binds them both."[27]
  26. Where a promise is made on one side and assented to on the other, or where two or more persons enter into an engagement with each other by a promise on either side.[28]
  27. A speech between two parties whereby something is to be done.[29]
  28. "When both parties will the same thing, and each communicates his will to the other, with a mutual engagement to carry it into effect."[30]
  29. "An agreement between two or more persons, whereby, in consideration of something done, or promised to be done, by the party on one side, the party on the other side undertakes to do, or not to do a particular thing."[31]
  30. "A compact between two or more parties."[32]

Statutory Definitions[edit | edit source]

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Simple and Special Contracts Included[edit | edit source]

  1. "Contract," in its widest sense, includes records and specialties, but the term Is usually employed to designate only simple or parol contracts.[33]
  2. "Though the term 'contract' is usually employed to designate either specialty or simple contracts, yet custom has affixed to the term all species of obligation; and in Sturges v. Crowninshield,[34] Ch. J. Marshall has defined a contract to be 'an agreement, in which a party undertakes to do, or not to do, a particular thing.' In this definition the consideration is omitted; and it was no doubt intended to embrace all kinds of contracts, whether by record, specialty, or parol." [35]
  3. "The term contract comprises, in its full and more liberal signification, every description of agreements, obligations, or legal ties, whereby one party binds himself, or becomes bound, expressly or impliedly, to pay a sum of money, or perform or omit to do a certain act."[36]

General Formation[edit | edit source]

The offer by one to do or not to do something becomes a promise when it is accepted by the party to whom it is made. Promise implies futurity; something to be done or left undone hereafter. Something carried out at its inception--like the sale of goods for cash over the counter, is a mere exchange, no promise, no obligation and hence no contract. The parties to a promise are called promisor and promisee and the result of the mutual promises is agreement.[37]

An executed contract is a contract which has been fully performed since it was made, or which was performed at the time it was made, so that nothing remains to be done on either side.[38] An executory contract is one which is either wholly unperformed, or in which there remains something to be done on both sides--as in the case of mutual promises to marry, where the promise of each party is the consideration for the promise of the other, or a promise on one side to furnish goods or perform services, and a promise on the other side to accept and pay for the same. A contract may be executed on one side as executory on the other,[39] as where one has paid for goods which another has agreed to deliver, or where one has delivered goods which another has promised to pay for.[40]

When the consideration on both sides of an executory contract is a promise the contract is bilateral. Where the promise is on one side only it is unilateral, and the offeree is not bound to perform at all nor until performance by him is the offerer bound; but on performance by the offeree the proposal of the offerer is turned into a binding contract. An offer of a reward is a good example of this.

References[edit | edit source]

  1. Ward v. Johnson
  2. As an agreement to constitute a contract must create a legal obligation, it is not correct to speak of a "void" contract--for it is the agreement which is void, i.e., destitute of legal effect and there is no contract at all. But the words contract and agreement have been so long used by writers and judges as meaning the same thing that it is too late to try to change legal terminology so far as this subject is concerned.
  3. 9 Cyc 240
  4. State v. Barker, Kan. 379, 886, 98 AmD 176
  5. Haskell, etc., Co. v. Allegheny Forging Co., 47 Ind. A. 392, 91 NE 975, 976; Komp v. Raymond, 176 N. Y. 102, 108, 67 NE 113; Langullle v. State, 4 Tex. A. 812, 821; To same effect Charles River Bridge v. Warren Bridge, 11 Pet. (U.S.) 420, 9 L. ed. 771, 938; Sturges v. Crowninshield,, 4 Wheat. (U.S.) 122, 4 L. ed. 529; American Can Co. v. Agricultural ins. Co., 12 Cal. A. 133, 106 P 720; Barlow v. Gregory, 31 Conn. 261; Weishut v. Layton, 28 Del. 364, 93 A 1057; Jones v. Tucker, 26 Del. 422, 84 A 1012; Modern Mach. Co. v. Perkins, 26 Del. 127, 80 A 1080; Speakman v. Price, 25 Del. 377, 80 A 627; Moline Jewelry Co. v. Otwell, 25 Del. 129, 78 A 300; Merritt v. Layton, 24 Del. 212, 75 A 795; Adkins v. Campbell, 22 Del. 96, 64 A 628; Peo. v. Dummer, 274 Ill. 637, 113 NE 934; Beverly v. Barnitz, 55 Kan. 486, 42 P 725, 49 AmSR 257, 31 LRA 74; Pfaff v. Gruen, 92 Mo. A. 560, 69 SW 405; Virginia City Gas Co. v. Virginia City, 3 Nev. 320; Union Free School Dist. No. 6 v. Union Free School Dist. No. 7, 76 App. Div. 355, 78 NYS 522 [aff 179 N.Y. 556 mem, 71 NE 112 mem]; Pierce v. Lewis, 9 Pa. Co. 250; Willis v. Turnley, 1 Tex. A. Civ. Cas. § 789; Swinburne v. Mills, 17 Wash. 611, 50 P 489, 61 AmSR 932; 2 Kent Comm. p 449.
  6. Robinson v. Magee, 9 Cal. 81, 83, 70 AmD 638.
  7. Blakemore v. Cooper, 15 N. D. 5, 13, 106 NW 566, 125 AmSR 574, 4 LRANS 1074 [quot Edwards v. Keaney, 98 U.S. 595, 24 L. ed. 793]
  8. Loma Prieta Lumber Co. v. Hinton, 12 Cal. A. 766, 771, 108 P 528.
  9. Justice v. Lang, 42 N. Y. 493, 497, 1 AmR 576 [quot 1 Comyn Contr. p 2].
  10. 1 Parson Contr. § 2. To same effect Jones v. Tucker, 26 Del. 422, 84 A 101; Modern Mach. Co. v. Perkins, 26 Del. 127, 80 A 1060; Speakman v. Price, 25 Del. 377, 80 A 627; Moline Jewelry Co. v. Otwell, 26 Del. 129, 78 A 300; Merritt v. Layton, 24 Del. 212, 75 A 795; Weinsberg v. St. Louis Cordage Co., 135 Mo. A. 553, 116 SW 461.
  11. Languille v. State, 4 Tex. A. ll12, 321 [quot Story Contr. § 1]. To same effect Miller v. Palmer, 58 Md. 451; Pelham v. State, 30 Tex. 422.
  12. Bishop Contr. § 22.
  13. Anson Contr. p 11.
  14. Hall Torts & Contr. p 153.
  15. Leake Contr. p 9.
  16. Pollock Contr. p 1.
  17. Chitty Contr. p 9;Haskell, etc., Co. v. Allegheny Forging Co., 47 Ind. A. 392, 91 NE 975, 976; Belt v. Marriott, 9 Gill (Md.) 331, 335.
  18. Hotchkiss v. New York Nat. City Bank, 200 Fed. 287, 293, (aff 201 Fed. 664).
  19. Per Washington, J., in Dartmouth College v. Woodward, 4 Wheat. (U. S.) 518, 656, 4 L. ed. 629 [quot 1 Powell Contr. p 6, and quot United Transp., etc., Co. v. New York, etc., Transp. Line, 180 Fed. 902, 904 (aff 185 Fed. 386, 107 CCA 442). To same effect Chesapeake, etc., Canal Co. v. Baltimore, etc., R. Co., 4 Gill & J. (Md.) 1.
  20. Safford v. Wyckoff, 4 Hill (N. Y.) 442, 456.
  21. McNeill v. Durham, etc., R. Co., 135 N. C. 682, 687, 47 SE 765. 67 LItA 227.
  22. J. I. Case Threshing Mach. Co. v. Meyers, 78 Nebr. 685, 687, 111 NW 602. 9 LRANS 970.
  23. Dietz v. Farish, 44 N. Y. Super 190, 199, 53 HowPr 217 (aff 79 N. Y. 520).
  24. Per Park, J., in Atwater v. Lockwood, 39 Conn. 45, 49.
  25. Per Birdseye, J., in McNulty v. Prentice, 25 Barb. (N. Y.) 204, 207.
  26. Wolfgram v. Schoepke, 123 Wis. 19, 26, 100 NW 1054, 3 AnnCas 398.
  27. Illinois Trust, etc., Bank v. Arkansas City, 76 Fed. 271, 285, 22 CCA 171. 34 LRA 518.
  28. 2 Stephen Comm. pp. 108, 109.
  29. The Mirror.
  30. Haynes v. Haynes, 1 Dr. & Sm. 426, 62 Reprint 442, 445.
  31. Wheeler v. Glasgow, 97 Ala. 700. 705. 11 S 758.
  32. Marshall. C. J., in Fletcher v. Peck, 6 Cranch (U. S.) 87, 136, 3 L. ed. 162.
  33. Pelham v. State, 30 Tex. 422.
  34. Sturges v. Crowninshield, 4 Wheat. (U. S.) 122, 4 L. ed. 529
  35. Sawyer v. Vilas, 19 Vt. 43, 46.
  36. Woodruff v. State, 3 Ark. 285, 301.
  37. McKinley v. Watkins, 13 Ill. 140; Brown v. Rice, 29 Mo. 322; Eliason v. Henshaw, 4 Wheat. 225; Tucker v. Woods, 12 Johns. 190, 7 Am. Dec. 305; King v. Warfield, 67 Md. 246; 1 Am. St. Rep. 384; Demoss v. Noble, 6 Iowa 530.
  38. McCutcheon v. Cleas, 26 Colo. app. 374; 143 p. 143. Leadbetter v. Hanley, 59 Or. 427 , 117 Pac. 289. This word as meaning a contract that has been fully performed by both parties has received much criticism. Anson calls it a slippery word (Contr. § 25), and Ashley (Contr. § 6), says that there is no such thing as an executed contract; that one might as well speak of a dead live man. In the subject matter of the contract has been performed that extinguishes it. It either exists or is terminated, is alive or dead. A layman usually speaks of a writing being "executed" when it is signed, or in the case of a deed, signed, sealed, and delivered.
  39. McNett v. Cooper, 13 Fed. Rep. 586; Justice v. Lang, 42 N. Y. 493, 496, 1 Am. Rep. 576.
  40. Winders v. Keenan, 161 N. C. 628; 77 S. E. 687.