West Virginia Law School 1L Study Guide for Contracts
I. Introduction to Contracts
A contract is a legally binding agreement between parties. A valid contract requires an offer, acceptance, consideration, and mutual agreement.
An offer is a proposal by one party to enter into an agreement with another. The offer must be definite, clear, and communicated to the offeree.
Acceptance is the offeree’s agreement to the terms of the offer. Acceptance must be communicated to the offeror.
Consideration is something of value exchanged by the parties. The consideration must be legal and both parties must be capable of delivering it.
D. Mutual Assent
Mutual assent means both parties agree to the terms of the contract.
II. Types of Contracts
There are several types of contracts, including express, implied, bilateral, and unilateral.
A. Express Contract
An express contract is explicitly spelled out and agreed upon by the parties.
B. Implied Contract
An implied contract is not explicitly stated but is inferred from the behavior of the parties.
C. Bilateral Contract
A bilateral contract involves a promise in exchange for a promise.
D. Unilateral Contract
A unilateral contract involves a promise in exchange for performance.
For a contract to be enforceable, it must be legal, possible to perform, and both parties must have the capacity to contract.
IV. Breach of Contract
A breach of contract occurs when a party fails to perform its obligations under the contract.
V. Defenses to Contract Enforcement
There are several defenses to contract enforcement, including duress, undue influence, mistake, and misrepresentation.
VI. Remedies for Breach of Contract
Remedies for breach of contract include compensatory damages, consequential damages, and specific performance.
VII. Important Case Law
A. Hamer v. Sidway, 124 N.Y. 538 (1891)
Issue: Whether forbearance is adequate consideration for a contract.
Rule: Forbearance can constitute adequate consideration.
Analysis: The uncle’s promise to pay his nephew $5,000 in exchange for abstaining from various vices until the age of 21 was a valid contract.
Conclusion: The nephew provided valid consideration by forbearing from the vices.
B. Lucy v. Zehmer, 196 Va. 493 (1954)
Issue: Whether a contract was formed when one party thought it was a joke.
Rule: A contract is formed if a reasonable person would believe it to be serious.
Analysis: Although Zehmer claimed he was joking when he agreed to sell his farm, his behavior led Lucy to reasonably believe he was serious. Therefore, a contract was formed.
Conclusion: The court enforced the contract.
C. Hadley v. Baxendale, 9 Ex. 341 (1854)
Issue: The extent of consequential damages for breach of contract.
Rule: Damages are limited to those which are reasonably foreseeable at the time of contract formation.
Analysis: Since Baxendale could not have reasonably foreseen the mill’s lost profits at the time of contract formation, he was not liable for them.
Conclusion: The court limited damages to those that were reasonably foreseeable.
D. Lefkowitz v. Great Minneapolis Surplus Store, Inc., 251 Minn. 188 (1957)
Issue: Whether an advertisement was an offer that could be accepted.
Rule: An advertisement can be a valid offer if it is clear, definite, and explicitly leaves nothing open for negotiation.
Analysis: The advertisement was an offer because it was clear, definite, and left nothing open for negotiation.
Conclusion: The court held that the contract was formed when Lefkowitz accepted the offer by being the first to claim the advertised item.
This guide provides a broad overview of important contract law concepts and case law. It should be used as a supplement to classroom learning and not as a substitute for in-depth study or legal advice. Remember that while this guide focuses on general principles, specifics can vary by jurisdiction and over time. Always refer to current and accurate resources.