LexisNexis Capsule Summary
Contracts
Chapter 1
SOURCES AND DEFINITIONS OF CONTRACT LAW
§ 1.01 What is a Contract?
A contract is formed in any transaction in which one or both parties make a legally enforceable promise. A promise is a commitment or undertaking that a given event will or will not occur in the future and may be express or implied from conduct or language and conduct. A promise is legally enforceable where it:
•was made as part of a bargain for valid consideration;
•reasonably induced the promisee to rely on the promise to his detriment; or
•is deemed enforceable by a statute despite the lack of
consideration.
§ 1.02 Types of Contracts
Contract may be of the following types:
1)Express – an agreement manifested by words
2)Implied-in-fact – an agreement manifested by conduct
3)Implied-in-law ("quasi-contract") – not a true contract but an
obligation imposed by a court despite the absence of a promise in
order to avoid an injustice
§ 1.03 Sources of Contract Law
1)Common Law– in most jurisdictions, contract law is not codified,
and thus the primary source of general contract law is caselaw.
2)Restatement– written by the American Law Institute to provide
guidance to the bench and bar, the Restatement of Contracts
(currently in the second edition) has no legal force but
nevertheless provides highly persuasive authority.
3)Uniform Commercial Code(UCC)– created under the auspices of
the American Law Institute and the National Conference of
Commissioners on Uniform State Laws, has been adopted by every
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state except Louisiana. Proposed revisions to Article 2, governing contracts for the sale of goods, have been finalized and presented to the states for enactment.
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4)United Nations Convention on Contracts for the International Sale
of Goods (CISG)– ratified by many of the leading trading
nations including the United States and China (but not the United
Kingdom and Japan), it governs many transactions for the sale of
goods between parties with places of business in different nations.
5)UNIDROIT Principles of International Commercial Contracts– non-
binding authoritative text similar to the Restatement.
6)Uniform Computer Transactions Act (UCITA) – addresses issues
arising out of computer licensing but has only been enacted in
Virginia and Maryland.
7)Uniform Electronic Transactions Act (UETA) –adopted by most
states, this act does not affect basic contract doctrine but
governs the use of electronic communications. It applies to
"transactions," defined as "the conduct of business, commercial or governmental affairs." Thus, it does not govern contracts such as those between family members or with non-profit institutions.
8)Electronic Signatures in Global and National Commerce Act (E-Sign)
– this federal law allows states to preempt it by enacting the
UETA.
§ 1.04 C ontracts for the Sale of Goods
[1] Application of UCC
Article 2 of the Uniform Commercial Code covers all transactions for the sale of goods other than securities (article 9) and leases (article 2A). It applies to any party; it is not limited to merchants although individual provisions may be.
[2] "Goods" Defined
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