Contract Law: An introduction
2. Teaching Aims and Demands • The definitions of offer and acceptance •
Requirements of an offer • Termination of an offer • Several aspects related to
acceptance: who can accept, unequivocal acceptance, silence as an acceptance,
communication of acceptance, and mode and timelines of acceptance.
3. Section 1 Contract Formation 1. Function of Contract Law 2. Definition of a
Contract • Restatement(2nd) Contract: A contract is “a promise or a set of promise
for the breach of which the law gives a remedy, or the performance of which the
law in some way recognizes as a duty”. • A contract is a legally binding agreement
between two or more parties who agree to perform or to refrain from performing
some act now or in the future.
4. 3. Requirements of A Valid Contract Agreement Offer and acceptance
Consideration. Something of value Contractual Capacity. Parties have the legal
and mental ability Legality Subject matter not against law
5. Types of Contracts
7. Promise by one party Promise by another party. Bilateral Contract. Promise by
one party. Promise of specific act by the other party.
8. Express versus implied-in-fact contracts Express Contracts. Implied-in-fact
Contracts • In an express contract, the terms of the agreement are fully and
explicitly stated in words, oral or written. • A contract thet implied from the conduct
of the parties is called an implied-in-fact contact.
8. Quasi Contract---Contract implied in law Quasi contract, or contracts implied in
law, are fictional contracts created by courts and imposed on parties in the
interests of fairness and justice. Quasi contracts are therefore equitable, rather
than contractual, in nature. Usually, quasi contracts are imposed to avoid the
unjust enrichment.
9. Executed versus Executory Contracts Executed Contracts. A contract that has
been fully performed on both sides is called an executed contract. A contract that
has not been fully performed on either side is called an executory contract.
10. Valid, void, voidable and unenforceable contracts valid contract has the
elements necessary to entitle at least one of the parties to enforce it in court.
Void contract: A void contract is no contract at all. A void contract produces no
legal obligations on the part of any parties. A voidable contract is a valid contract
but one that can be avoided at the option of one or both of the parties. Voidable
contract Unenforceable contract An enforceable contract is one that cannot be
enforced because of certain legal defenses against it.
11. An agreement is that the parties must agree on the terms of the contract and
manifest to each other their mutual assent to the same bargain. Definition
Constitution: An agreement is constituted by two events: offer and acceptance.
Categories Contractual and moral (or social) agreement: A contractual agreement
only arises when the terms of the agreement impose legally enforceable
obligations on the parties.
12. What is an offer? • An offer is a promise or commitment to do or refrain from
doing some specialized thing in the future. • Requirements of the offer: a serious
intention; definite terms; communicated by the offeror to the offeree.
13. The types of expressions and statements that are not offers • Offers made in
obvious anger, jest or undue excitement • Expressions of opinion • Statements of
intention • Preliminary negotiations • Agreement to agree • Advertisements
14. Definiteness of Terms • The identification of the parties • The identification of the
object or subject matter of the contract (also the quantity, when appropriate),
including the work to be performed • The consideration to be paid • The time of
payment, delivery or performance
15. Termination of the Offer • Termination by the action of the parties • Revocation of
the offer by the offeree • Irrevocable offers • Rejection of the offer by the offeree •
Counteroffer by the offeree • Termination by operation of law • Destruction of
specific subject matter of the offer • Lapse of time • Death or incompetence of the
offeror or the offeree • Supervening illegality of the proposed contract
16. What is acceptance? 1. Definition: Acceptance is a voluntary act (either words or
conduct)by the offeree that shows assent(agreement) to the terms of an offer. 2.
Requirements of an acceptance: 1) Acceptance on by offeree 2) Acceptance must
agree with the offer (“Mirror image” rule) 3) Silence as an acceptance 4)
Acceptance must be communicated to the offeror
17. Communication of Acceptance if there is an authorized means of acceptance
(Mailbox rule), Effective when sent if there is not an expressly or impliedly
authorized means of acceptance, but the acceptance is sent by reasonable
means. Effective when received If the offeror specifies that acceptance will not be
effective until actually if the offeror uses a means other than that requested by the
offeror
18. Consideration • Definition • Consideration is usually defined as the value (such as
money) given in a return for a promise (such as the promise to sell a stamp
collection on receipt of payment). • Nature of consideration • Does something (an
act) or promise to do something he or she is not legally bound to do. • Refrains
(from an act) or promises to refrain from doing something she or he has a legal
right to do.
19. Agreements That Lack Consideration • Preexisting duty • Past consideration is
a promise made for an act that has already taken place. Past consideration is no
consideration.
20. Contractual capacity is the legal ability to enter into a contractual relationship.
Minors Situations in which capacity is lacking or may be questionable Intoxication
Mentally ill persons
21. Fraudulent Misrepresentation Mistakes Situation, Lacking of Genuineness of
Assent, Duress, Undue influence
22. Complete Performance Discharge by Performance, Substantial Performance,
Performance to the Satisfaction of One of the Parties, Performance to the
Satisfaction of a Third Party
23. Discharge by Rescission Discharge by Novation, Discharge by Agreement,
Discharge by Substituted Agreement, Discharge by Accord and Satisfaction
24. Alteration of the Contract Statutes of Limitations Discharge by Operation Of Law,
Bankruptcy Impossibility of Performance
25. Damages Rescission and Restitution, Remedies, Specific Performance
Reformation
26. Compensatory Damages Consequential Damages, Types of Damages: Punitive,
Damages, Nominal Damages, Liquidated Damages
27. Exercises（1） • 1. What essential elements should a contract include, if you
want to create a valid contract? • 2. List the initial step to form a contract, and
explain them. • 3. Johnson said to Mehta, “I’ll sell you my stereo for $200.” Mehta
replied, “I’ll buy it for $150.” Has a binding contract been formed? Why or why not?
• 4. In the American Contract Law, what kind of person does not have legal and
mental ability to enter into a binding contract?
28. Exercises（2） • 5. How does a contract differ from a mere social agreement? • 6.
Why does the law protect minors in their dealings with adults? • 7. Roberts was an
important witness in a criminal case about to be tried. She was promised $5,000
not to testify. She then sued to collect the $5,000. Will Roberts succeed?
29. Exercises（3） • 8. Sargent orally agreed to purchase a piece of land from
Bobston. To confirm the agreement, Sargent wrote a letter to Babson that
contained all the terms of the transaction and was signed by Sargent. When
Sargent refused to pay, pleading the statute of frauds as his defense. Is Hill liable?
• 9. What is the parol evidence rule? • 10. Under the common law, what are the
three ways in which a contract can be discharged by impossibility? • 11. List the
different remedies that courts possibly award to the plaintiffs in a British and
American legal system country?
30. Exercises（4） • 12. Describe the difference between offer and acceptance. • 13.
The difference between the form of the contract and the valid of the contract. • 14.
The various forms of breach of contract among the countries such as Britain,
America, Germany and France. • 15. Write the main terms of a contract in English.
