I. Contract Formation
A. Offer and Acceptance: For a contract to exist, there must be an offer and acceptance. An offer is an act whereby one person confers upon another the power to create contractual relations between them. An acceptance is a final and unqualified expression of assent to the terms of an offer.
Case: Lucy v. Zehmer (1954) – The court held that an agreement was enforceable where the parties had a meeting of the minds and demonstrated intent to be bound.
B. Consideration: Consideration is something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances.
Case: Hamer v. Sidway (1891) – A nephew refraining from smoking, drinking, and swearing was deemed sufficient consideration for his uncle’s promise of $5,000.
II. Contract Enforceability
A. Capacity: The parties to a contract must have the capacity to enter into the agreement. Minors, intoxicated persons, and those under a mental incapacity have protections against contract liability.
Case: Mohori Bibee v. Dharmodas Ghose – A minor’s contract was held void and unenforceable.
B. Misrepresentation, Duress, Undue Influence, Unconscionability: These factors can make a contract unenforceable.
Case: Williams v Walker-Thomas Furniture Co. – The court found that a contract was unconscionable and therefore unenforceable.
III. Contract Terms
A. Express and Implied Terms: Terms can be explicitly stated in the contract (express) or can be implied by fact or law.
Case: Haines v. City of New York – Court held that a term could be implied in order to give effect to the parties’ intentions.
B. Condition Precedent: A condition that must be fulfilled before a party’s performance can be required.
Case: Maudsley v. Maudsley – The court found that the condition precedent had not occurred, so the wife was not entitled to the payment.
IV. Performance and Breach of Contract
A. Performance: When the parties to the contract fulfill the obligations outlined in the contract.
B. Breach of Contract: When one party fails to fulfill their obligations under the contract.
Case: Hadley v. Baxendale – The court set the rule for the calculation of damages for breach of contract.
V. Remedies for Breach of Contract
A. Money Damages: The default legal remedy for breach of contract.
B. Specific Performance: Court orders the breaching party to perform under the contract. Used when money damages are insufficient.
Case: Lumley v. Wagner – Singer was ordered to abstain from singing elsewhere, but not ordered to sing at Lumley’s theatre.
VI. Third Party Rights
A. Third Party Beneficiaries: A third party who stands to benefit from the contract.
B. Assignment and Delegation: Assignment transfers rights under the contract to another party, delegation transfers duties.
Case: Lawrence v. Fox – Court allowed a third-party beneficiary to sue the promisor directly.
Remember to focus on understanding the concepts rather than memorization, and to practice applying these concepts to different fact patterns. Contracts law can be complex, but with focused and consistent study, you can successfully master this subject.