The Objective Theory Of Astract: An Introduction To Contract Law

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Part A - Contract law Introduction to Contract Law A. Contracts defined 1. Contracts are enforceable promises, or voluntary agreements that govern economic exchange (private ordering) 2. Free market economy relies on the ability of private parties to enter these exchanges and obtain gains from trade B. Contract law purposes 1. Retrospectively: provide parties with their bargain (including the remedy for failure to perform) a. Altruistic/Cooperation v. Opportunistic Behaviour b. Achieve socially desirable results 2. Prospectively: law sets the rules a. Sorts enforceable from unenforceable promises b. Provides the parties a convenient set of default rules c. Determines which rules should be mandatory 3. Limits to enforceability a. Lack of…show more content…
Restitution: Places the promisor in the position he would have been had the promise not been made. “Disgorge profits from breaching party” Part II: Contract Formation I. The Objective Theory of Assent Requirement of a bargain 1. A contract is created by a bargain with a manifestation of mutual assent and consideration 2. Comment: “Meeting of the minds” has been changed to “manifestation of mutual assent” because mental reservation does not impair obligation Texaco v. Pennzoil (281): Texaco argues that their meetings with Getty show they were not assenting to a deal with Pennzoil 1. Outcome: Court says SEC and press release were outward and objective manifestations, whereas Texaco-Getty conversations cannot be considered by jury because they were secret manifestations to which Pennzoil was not a party 2. All that matters is objective intent to be bound Conduct as manifestation of assent 1. Written or spoken words or acts 2. Not manifestation unless party intends to engage in conduct and knows other party may infer assent from conduct 3. If conduct manifests assent without actual assent, then contract may be voidable Ambiguity A. Objective Theory of Assent: doesn’t matter what others meant by what they said or did—what matters is objective account of what they…show more content…
Non-negotiable, take-it-or-leave-it 2. Cost-saving aspect that buyer gets lower prices in saving seller negotiation fees B. Carnival Cruise Lines v. Shute (424): Shute bought cruise in WA with forum clause set for FL. Boarded in LA, injured on deck mat, sued for negligence, and Carnival moved for Summary Judgment bc forum clause 1. Outcome: Court held forum clause enforceable bc FL court would be competent jurisdiction and the Shutes had notice of the clause a. Policy argument: forum clause lets passengers benefit from reduced fares by saving cruise line money in limiting forum 2. Problem: bad faith motive of deterring passengers from suing a. If some kind of negotiation takes place, it’s easier to infer a meeting of the minds 3. Laywer’s mistake was conceding notice, because clause would not be enforceable 4. Dissent: they lacked reasonable time to read/reject terms since they only received them when they arrived, when it was too late/risky to cancel their trip. a. If not bargained-for, should not be enforceable. b. Notice doesn’t matter if you can’t decide whether you want to abide or reject Part B –

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