Georgia Law School 1L Study Guide for Contracts
I. Overview of Contract Law
Contract law governs the creation, enforcement, and dissolution of legally enforceable agreements. Central concepts include offer, acceptance, consideration, and the intention to create legal relations. In Georgia, contract law is codified under the Official Code of Georgia Annotated (O.C.G.A.) and is influenced by the common law tradition.
II. Formation of Contracts
A. Offer
– An offer is a clear promise to enter into a contract on specific terms. It must be communicated to the offeree and lead to an expectation that upon acceptance, a contract will be formed.
– Relevant Case: Lucy v. Zehmer (1954): The court held that the outward expression of intent, rather than the internal intent, is what matters in determining whether an offer was made.
B. Acceptance
– Acceptance must be an unequivocal affirmative response to the terms of the offer and can be expressed or implied from conduct.
– Silence typically does not constitute acceptance unless there are prior dealings or circumstances indicating otherwise.
– Relevant Case: Ever-Tite Roofing Corp. v. Green (1955): Acceptance by performance and the offeree beginning performance indicated acceptance of the offer.
C. Consideration
– Consideration refers to the value exchanged in a contract. It can be a promise, an act, or forbearance, and must be legally sufficient.
– Past consideration is not valid consideration for a new contract.
– Relevant Case: Hamer v. Sidway (1891): A nephew’s forbearance from legal rights (e.g., drinking, smoking) was deemed adequate consideration for the uncle’s promise to pay.
D. Defenses to Formation
– A contract may not be formed due to lack of capacity, duress, undue influence, misrepresentation, or mistake.
– O.C.G.A. § 13-3-24: Contracts for necessaries are enforceable against minors, but other contracts are voidable.
III. The Statute of Frauds (O.C.G.A. § 13-5-30)
– Certain contracts must be in writing to be enforceable, including those for the sale of land, contracts that cannot be performed within one year, and surety agreements.
IV. Terms of the Contract
– Identify express terms, implied terms, and those imposed by law.
– The parol evidence rule prevents the introduction of evidence of prior or contemporaneous agreements that would alter the written contract (O.C.G.A. § 24-3-1).
V. Performance and Breach
A. Performance
– Performance must match contractual obligations. Substantial performance, short of complete performance, may still entitle the performing party to payment, with deductions for uncompleted work.
B. Breach of Contract
– A material breach discharges the non-breaching party from their obligations and may lead to damages or other remedies.
– Anticipatory repudiation occurs when one party unequivocally indicates they will not perform their obligations, allowing the other party to sue for breach immediately.
VI. Remedies for Breach of Contract
A. Damages
– Expectation damages put the non-breaching party in the position they would have been in had the contract been performed.
– Consequential damages cover indirect losses stemming from the breach.
B. Equitable Remedies
– Specific performance, a court order to perform the contract, is available when damages are insufficient, typically in real estate transactions.
– Injunctions may be used to prevent a party from acting in breach of the contract.
VII. Third Party Rights
– Assignment allows a party to transfer their rights under a contract to a third party.
– Delegation allows a party to transfer their duties under a contract to a third party.
– Third-party beneficiary contracts benefit a person who is not a party to the contract and may have the right to enforce the contract if intended by the original parties.
VIII. Contract Interpretation
– The objective theory of contracts is used to interpret the parties’ intent.
– Courts will interpret ambiguous terms against the drafter (contra proferentem).
IX. Public Policy and Illegality
– Contracts that violate public policy or require the performance of illegal acts are void and unenforceable.
X. Cases Specific to Georgia
– Georgia follows the modern trend for the objective theory of contract interpretation.
– O.C.G.A. § 13-2-1 states that parol evidence is inadmissible to add to, take from, or vary a written contract, which aligns with the parol evidence rule.
This study guide serves as an outline of the major topics within contract law that are relevant to a 1L student in Georgia. For a comprehensive examination preparation, students should dive deeper into each of these topics, review their class notes, case briefs, and practice applying these concepts to hypothetical situations.