Contract Law Lecture One: Contract Formation / Navigating the Core Elements of Contracts (Part 1 of 3) (Part 2)

Law School

This conversation delves into the fundamental aspects of contract formation, exploring the essential elements such as mutual assent, offer and acceptance, consideration, capacity, and legality. It also discusses various defenses that can affect the enforceability of contracts, providing a comprehensive overview for those preparing for law school exams or practicing in the field.

Takeaways

Contract formation is critical for law students and practitioners.

Mutual assent is essential for a valid contract.

An offer must be clear and definite to be valid.

Consideration must involve a bargain for exchange.

Capacity to contract is necessary for enforceability.

Legality of the contract's purpose is crucial.

Defenses like misrepresentation can void a contract.

The UCC provides flexibility in contract formation.

Common law and UCC differ in their approach to contracts.

Understanding these elements is foundational for contract analysis.

A contract is a legally enforceable agreement between two or more parties that creates mutual obligations. It governs how these obligations are created, modified, enforced, and extinguished.

The two principal sources are Common Law, governing service agreements and real estate, and Article Two of the U.C.C., governing contracts for the sale of goods.

Mutual assent means the parties agree to the same thing in the same sense. The objective theory means this is determined by a party's outward expressions and conduct, not their secret intentions.

A valid offer requires intent, reasonably definite terms, and communication to the offeree.

An offer can be terminated by revocation, rejection, counteroffer, lapse of time, or death/incapacity of a party.

The Mirror Image Rule states that an acceptance must exactly match the terms of the offer. If it introduces different or additional terms, it is a counteroffer.

Yes, under U.C.C. § 2-207, an acceptance with additional or different terms can still form a contract unless it is expressly conditional on assent to the new terms.

Consideration is the legal term for what each party gives or promises to give in exchange for the other party's promise; it is a bargained-for exchange of something of legal value.

Past consideration and the preexisting duty rule are two doctrines that limit what qualifies as consideration.

The Statute of Frauds requires certain contracts to be in writing to be enforceable. Examples include contracts for the sale of goods priced at $500 or more, contracts that cannot be performed within one year, or contracts for the sale of real estate.

Sound Bites

• "Understanding them isn't just for exams."
• "The UCC is often more flexible."
• "Mutual assent is the meeting of the minds."
• "Consideration is the price of the promise."
• "Capacity is key in contract law."

Chapters

00:00 Understanding Contract Formation

10:01 The Core Elements of a Contract

20:05 Defenses Against Contract Enforcement