can some one help me with this exam .i will attach all the notes that you need to answer the questions.

Nature of Traditional and E-Contracts

“The movement of the progressive societies has hitherto been a movement from status to contract.”

Sir Henry Maine

I. Teacher to Teacher Dialogue

What elevates a mere agreement between two or more private parties into a legally recognized contract is the willingness of the public, through its courts, to enter the fray and enforce the contract rights and duties.

Students need to have some exposure to some of the working vocabulary of contract law. As is the case with all specialized forms of endeavor, a contract has a language all its own, and a basic knowledge of some of the key terms used in contracts is essential. The key contract terms used tend to be dichotomous, and you can use that dichotomy as a learning tool. Take for example, the number of parties to a contract. At least two parties are required in all contracts. One of those two parties has to initiate the contract formation process. The person starting the mutual assent process with a promise is the offeror, the other person is the offeree. Next, look at the dichotomy of the promises being used: is it a promise for a promise (bilateral) or is it a promise for an act (unilateral)? Have these promises been expressly made or can they somehow be implied from the circumstances? Does the form that this agreement is taking require certain formalities (such as a negotiable instrument), or can it be done in any manner chosen by the parties (informal) as long as the elements of contract are met?

Once the parties have formed an agreement, are the performance obligations already fully met (executed), or are there still remaining performance obligations on the part of one or more of the parties (executory)? In addition, you may have to examine issues of enforceability. If all the elements are in place, the agreement is now considered a valid contract. If one or more of the essential elements is missing, the agreement is not raised to the status of contract and may be legally void. There are also certain situations where a contract is created, but it will not be enforced. If a legal defense is found to be in place, such as a writing requirement, the contract may be an unenforceable contract. Sometimes, certain persons are given a legally recognized power to avoid a contract after it has been entered into. These contracts are voidable, and examples of this sort of situation can be found in cases involving young people with limited mental capacity.

II. Chapter Objectives

Define contract.
List the elements necessary to form a valid contract.
Distinguish between bilateral and unilateral contracts.
Describe and distinguish between express and implied-in-fact contracts.
Describe and distinguish among valid, void, voidable, and unenforceable contracts.

III. Key Question Checklist

What body of contract law will control the formation, rights, duties, and remedies of this agreement?
Are the four elements of a contract in place?
How is this contract defined? Formal or informal? Executed or executory?
Are there any defenses that make the contract unenforceable?

Text Materials

Contracts are the basis for most of our activities. They are voluntarily entered into and the terms become a form of private law between the parties. Most are legally enforceable, with the breaching party being subject to damages ordered by the courts.

Definition of a Contract

A contract is an agreement that is enforceable by a court of law or a court of equity.

Parties to a Contract – The offeror makes the offer to the offeree. The contract is created when the offeree accepts the offer.

Elements of a Contract – Enforceable contracts require that there be an offer and acceptance, which form an agreement between the parties. To be a contract, the agreement must show mutual assent, consideration, capacity, and legality.

Defenses to the Enforcement of a Contract – There are two defenses to the enforcement of a contract: genuineness of assent and writing and form.

Sources of Contract Law

Common Law of Contracts – This source of contract law developed from primarily state court decisions became precedent.

Landmark Law: The Uniform Commercial Code (UCC)

The UCC has been adopted, in whole or in part, by every state, and takes precedence over common law. Article 2 deals with sales and Article 2A deals with leases.

The Restatement of the Law of Contracts – The Restatement, currently in its second edition, is not law, but merely serves as guidance to the legal community.

Objective Theory of Contracts

This theory applies the reasonable person standard to contracts.

Critical Legal Thinking – This theory allows for consistency in handling contract formation and breach of contract types of cases.

Case 9.1 Contracts: Facebook, Inc. v. Winklevoss

640 F.3d 1034, 2011 U.S. App. Lexis 7430 (2011), United States Court of Appeals for the Ninth Circuit

Facts: Zuckerberg roomed with a set of twins at Harvard who alleged that Zuckerberg stole the entire idea of Facebook from a product they were trying to create. A judge had the parties mediate the dispute and they reached a settlement agreement, which was lucrative for all parties concerned.

Issue: Is the settlement agreement enforceable?

Decision: The settlement agreement is enforceable.

Ethics Questions: Whomever stole whatever from whom, all parties have made very significant money from the one product, Facebook, which was fully developed.

E-Commerce

Electronic commerce and e-contracts have created a new set of problems to be considered.

Digital Law: Electronic Contracts and Licenses

The Uniform Computer Information Transactions Act (UCITA) establishes uniform legal rules for the formation and enforcement of electronic contracts and licenses. The Uniform Electronic Transactions Act (UETA) provides a legal framework for electronic transactions.

Classifications of Contracts

Bilateral and Unilateral Contracts – A bilateral contract is a promise for a promise. The exchange of promises creates the enforceable contract. A unilateral contract is one where the offer can be accepted only by the performance of an act by the offeree. Offers can be revoked by the offeror at any time before the offeree has begun performance.

Formal and Informal Contracts – Contracts may be formal, such as negotiable instruments, letters of credits, recognizance, and contracts under seal, or informal or simple contracts, like leases, sales contracts, and service contracts. The distinction is that formal contracts require a special format or method.

Valid, Void, Voidable, and Unenforceable Contracts – Valid contracts meet all the essential elements and are enforceable by at least one of the parties. A void contract has no legal effect, and neither party can enforce it. Contracts where at least one party can avoid their contractual obligations are voidable contracts. If there is a legal defense to the enforcement of a contract, it is called an unenforceable contract, but the parties may choose to voluntarily perform the contract.

Executed and Executory Contracts – Contracts that have not yet been fully performed by either side are called executory contracts; those that have been completed are executed contracts.

Express and Implied Contracts

Express Contract – Express contracts may be either oral or written, whereas implied-in-fact contracts are implied by the activities of the parties.

Implied-in-Fact Contract – Implied-in-fact contracts require that the plaintiff supply property or services to the defendant that they expected to be paid for, and that the defendant had an opportunity to reject the property or services and failed to do so.

Implied-in-Law Contracts (Quasi-Contracts) – This is an equitable remedy that allows a court to award monetary damages to prevent unjust enrichment and unjust detriment in the case where there is no enforceable contract between the parties.

Case 9.2 Implied-In-Fact Contract: Wrench LLC v Taco Bell Corporation

256 F.3d 446, 2001 U.S. App. Lexis 15097 (2001), United States Court of Appeals for the Sixth Circuit

Facts: Rinks and Shields created a “Psycho Chihuahua” cartoon character that they promoted through their company, Wrench LLC. They were approached by Taco Bell to adapt the character for use in their advertising. Later, the idea was adjusted to include a real dog that was digitally manipulated. Rinks and Shields created several ads, including one in which a male dog passes up a female dog to get to the Taco Bell food. Taco Bell did not enter into an express contract with them, but, a few weeks later, hired Chiat/Day to produce the same style ads, one of which was the male dog passing on up a female dog to get the Taco Bell food. Wrench, Rinks, and Shields sued for breach of an implied contract. The District Court granted summary judgment to Taco Bell, and the plaintiffs appealed.

Issue: Is there a breach of an implied-in-fact contract?

Decision: Yes, and Taco Bell ultimately was forced to pay $30M plus $11.8M in interest to the plaintiffs. The U.S. Court of Appeals held that Taco Bell understood that if they used the “Psycho Dog” concept, it would have to pay the plaintiffs. They found that there was strong circumstantial evidence that Taco Bell was using the concept, and reversed and remanded the case back for trial.

Ethics Questions: Taco Bell really messed this one up and the court held them to be accountable for their breach of ethics.

Critical Legal Thinking – To protect unilateral performance contracts and to protect parties who rely to their detriment on others. They are difficult to prove. The purpose of recognizing implied-in-fact contracts is to prevent unjust enrichment. Damages awarded should properly include punitive damages, as the action can be considered theft.

Equity

Equity is resorted to when monetary damages are not sufficient or are not a proper remedy.

Critical Legal Thinking Case Equity: Equity Saves Contracting Party from the Terms of Their Contract

This explores a situation in which the court applied equitable remedies to protect the interests of lessees. The landlord acted unethically in trying to keep what had become a coveted enterprise for himself, and failing to accept the renewal option when there had been such a minimal delay in giving notice. Recognizing equity places the United States in a morally superior position to other nations in terms of handling breach situations.

V. Key Terms and Concepts

Acceptance—An agreement requires an offer by the offeror and an acceptance of the offer by the offeree.
Actual contract—An actual contract may be either express or implied-in-fact.
Agreement—To have an enforceable contract, there must be an agreement between the parties.
Article 2 (Sales)—Article 2 (Sales) prescribes a set of uniform rules for the creation and enforcement of contracts for the sale of goods.
Article 2A (Leases)—Article 2A (Leases) prescribes a set of uniform rules for the creation and enforcement of contracts for the lease of goods.
Bilateral contract—A contract entered into by way of exchange of promises of the parties; “a promise for a promise.”
Common law of contracts—Contract law developed primarily by state courts.
Consideration—A promise must be supported by a bargained-for consideration that is legally sufficient.
Contract—A contract is an agreement that is enforceable by a court of law or equity.
Contractual capacity—The parties to a contract must have contractual capacity for the contract to be enforceable against them.
E-contract law—Contract law that is based on electronic contracts (e-contracts) and electronic licenses (e-licenses).
Electronic commerce—The sale and lease of goods and services and other property and the licensing of software over the Internet or by other electronic means.
Electronic contract—A contract that is formed electronically.
Electronic license—Electronic licensing is usually of computer and software information.
Equity—A doctrine that permits judges to make decisions based on fairness, equality, moral rights, and natural law.
Executed contract—A contract in which the essential elements to create a valid contract are met but there is some legal defense to the enforcement of the contract.
Executory contract—A contract that has not been fully performed by either or both sides.
Express contract—An agreement that is expressed in written or oral words.
Form—The law requires that certain contracts be in writing or in a certain form.
Formal contract—A contract that requires a special form or method of creation.
Genuine—The consent of the parties to create a contract must be genuine.
Genuineness of assent—The consent of the parties to create a contract must be genuine.
Implied-in-fact contract—A contract in which agreement between parties has been inferred from their conduct.
Informal contract—A contract that is not formal. Valid informal contracts are fully enforceable and may be sued upon if breached.
Lawful object—The object of a contract must be lawful. Most contracts have a lawful object.
Lease contract—Article 2A (Leases) prescribes a set of uniform rules for the creation and enforcement of contracts for the lease of goods. These contracts are referred to as lease contracts.
Legally enforceable—A contract in which if one party fails to perform as promised, the other party can use the court system to enforce the contract and recover damages or another remedy.
Letter of credit—An agreement by the issuer of the letter to pay a sum of money upon the receipt of an invoice and other documents.
Negotiable instrument—Negotiable instruments, which include checks, drafts, notes, and certificates of deposit, are special forms of contracts recognized by the UCC.
Objective theory of contracts—A theory that says the intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties.
Offer—An agreement requires an offer by the offeror and an acceptance of the offer by the offeree.
Offeree—The party to whom an offer to enter into a contract is made.
Offeror—The party who makes an offer to enter into a contract.
Quasi-contract—An equitable doctrine whereby a court may award monetary damages to a plaintiff for providing work or services to a defendant even though no actual contract existed. The doctrine is intended to prevent unjust enrichment and unjust detriment.
Reasonable person standard—The objective theory of contracts holds that the intent to enter into an express or implied-in-fact contract is judged by the reasonable person standard.
Recognizance—In a recognizance, a party acknowledges in court that he or she will pay a specified sum of money if a certain event occurs.
Restatement of the Law of Contracts—A compilation of model contract law principles drafted by legal scholars. The Restatement is not law.
Restatement (Second) of Contracts—The Restatement, which is currently in its second edition, is cited in this book as the Restatement (Second) of Contracts.
Sales contract—Article 2 (Sales) prescribes a set of uniform rules for the creation and enforcement of contracts for the sale of goods. These contracts are often referred to as sales contracts.
Traditional contract law—UCC and common law contracts.
Unenforceable contract—A contract in which the essential elements to create a valid contract are met but there is some legal defense to the enforcement of the contract.
Uniform Commercial Code—A comprehensive statutory scheme that includes laws that cover aspects of commercial transactions.
Uniform Computer Information Transactions Act—A model act that establishes uniform legal rules for the formation and enforcement of electronic contracts and licenses.
Unilateral contract—A contract in which the offeror’s offer can be accepted only by the performance of an act by the offeree; a “promise for an act.”
Valid contract—A contract that meets all the essential elements to establish a contract; a contract that is enforceable by at least one of the parties.
Void contract—A contract that has no legal effect; a nullity.
Voidable contract—A contract in which one or both parties have the option to void their contractual obligations. If a contract is voided, both parties are released from their contractual obligations.
Writing—The law requires that certain contracts be in writing or in a certain form.