U niversity of M iami Paralegal Certificate Program

1. University of MiamiParalegal Certificate Program Contracts July 2010

2. BREACH OF CONTRACTROAD MAP

3. 6 Essential Steps

4. Step 1 • Choice of Law • Cannot determine validity without knowing law • Where • Which Court

5. Step 2 • Contract Formation • Determination if a Contract is Formed………

6. Step 3 • Contract Enforceability • Unenforceable Contract – No Cause of Action • If Contract is Enforceable ………

7. Step 4 • Plaintiff's Allegations of Breach of Contract

8. Step 5 • Defendant's Response to Plaintiff’s Allegation of Breach of the Contract ? No Breach….Compliance – No Cause of Action Fulfill obligation ? No Breach….Excuse – No Cause of Action Justification impossibility

9. ? No Breach….Justification – No Cause of Action Prior breach ? No Breach…Duty Terminated – No Cause of Action By agreement or law Breach of Enforceable Contract… Cause of Action

10. Step 6 • Plaintiff’s Remedies for the Defendant’s Breach of Contract • Expectation Interest - Damages Specific Performance or Injunction • Reliance Interest - Reasonable Value • Restitution Interest - Value of Benefit

12. Step 1. Determining the Rules Governing the DisputeChoice of Law

13. Laws of U.S. or another Country • Laws of U.S or a State • In the State Case Law, Statute, or Code • Procedural Rules: Each state has its own Procedural, substantive and evidentiary rules • Federal Preemption State Law must give way to Federal Law when Federal Law expressly regulates or is beyond the bound of state action

14. State Determination Forum State – The state in which the action is filed. All states determine their own laws Different outcomes may occur when a transaction spans more than one state

15. Contract Provision The parties to a contract may state their preference of state law – choice of law provision Party autonomy rule – a court will give deference to the parties choice of law

16. Contractual Provision • This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, determined without regard to principles of conflicts of laws. • You may also have a provision to determine venue, such as: • Venue shall reside in the State and Federal Courts in Miami-Dade County for all disputes arising under the Agreement.

17. Exceptions to Choice of Law: No substantial relationship Public policy

18. Silent Contract The court must determine applicable law if the contract fails to contain a provision 1. Place of making 2. Place of performance 3. Restatements of the Laws – Most significant contacts: Place of contracting, Place of negotiation, Place of performance, Location of the subject matter, and Domicile of the parties

19. Determining Rules within the Forum Legislative – Statutes and Codes, including the UCC (limited to the sale of goods) Judicial – Case Law

20. Hybrid Transaction • While the UCC is limited to the sale of goods, an issue arises when it comes to hybrid transactions – a transaction that includes goods and services e.g. the sale and installation of an HVAC system or an automobile repair. • Predominate factor test: used in hybrid transactions to see if the UCC Article 2 applies or the common law.

21. Step 2Contract FormationThe Offer Phase It can be on anything

22. The Offer Offeror (promisor) makes promise to Offeree (promisee) Must manifest a willingness to enter into a contract by inviting the promisee to agree to the promisor’s terms Determination: Objective 3rd party Reasonable Person Standard vs. Subjective Meeting of the Minds Standard

23. Offeror’s Promise and Consideration • Offer: • Promisor’s Promise • Consideration – Price • Consideration Two Elements • Promisee’s promise or performance • Inducement

24. Bilateral Contract Three Elements: 1. Promise assurance of what offeror is willing to do 2. Consideration of what is given for promise 3. Inducement of promise causes a return promise Hypothetical: Bob tells James that he will give him $1000.00 (promise) to stop drinking (promise)

25. Unilateral Contract Three Elements: • Promise assurance of what offeror is willing to do • Consideration of what is given for promise • Inducement of promise causes performance Hypothetical: Bob tells James that he will sell his tractor (promise) for $1000.00 (performance)

26. Offer verses Preliminary Negotiation (Inquiry) • Offer is the manifestation of the willingness to enter into a bargain to justify another person to understand that his assent to bargain is invited and will conclude it….. Reasonable person standard – objective standard Meeting of the minds – subjective standard

27. Advertisements • An offer need not be addressed to a specific party • The general rule followed in most states is that an advertisement is not an offer but merely an invitation to bargain – lack promissory language

28. Auction • With Reserve – Floor May withdraw at anytime-offer made by auctioneer • Seller may bid • Without Reserve – Absolute Auction • Sold to highest bidder • Seller may not bid • Presumption is With Reserve • Stating Highest Bidder at beginning does not mean it is Without Reserve

29. When is a Promise a Promise A promise is an unequivocable assurance that something will or will not be done Illusory Promise – Not a promise Hypothetical: I may sell you my car (not unequivocal) Indefinite Promise – Not a promise I promise to sell you a cow for $10 (not specific)

30. Uniform Commercial Code • Applies to the sale of goods • Gap Fillers (part 3 of Article 2 of the UCC) are terms that the code supplies to complete the missing terms • Very detailed but enables enforcement of the contract • Applies when the parties intended to make a contract • Must be a reasonably certain basis to give an appropriate remedy

31. Consideration • The “price” that the offeror expects to receive • “Price” is more than money as it can be other things • Barter exchange of item for item, service for service, or even item for service

32. Every Contract has Two Considerations • Bilateral example • Price in the offer for the offeror’s promise • Price in the acceptance for the offeree’s promise • Promise to sell and promise to pay

33. 1. Promise for Future Gift One sided so not enforced – no consideration Need not return gift that was Already given, but need not enforce if gift has not been transferred

34. 2. Adequacy of Consideration Irrelevant- will not be reviewed by court $10 and other good and valuable consideration “Love and Affection” not consideration

35. 3.Motive as Consideration Motive is not relevant Court does not care why you are doing a particular thing Cannot rescind transaction because motive cannot be completed/filled

36. 4. Moral Obligation Moral obligation does not make consideration

37. 5. Sham Consideration Consideration that is never intended to be delivered between the parties

38. Promise Made To Induce Consideration • Bargained for exchange - Now • Not past consideration • Timing of the issue • If already occurred (promised or performed) than not being made to induce consideration or promise

39. Pre-existing duty - Not past duty Conditions for consideration - Unilateral contracts Dependent on the performance, the condition Offeror’s motive is the key

40. Consideration vs. Condition • The consideration versus condition problem solely occurs in unilateral contracts • It stems from the inducement • Did the promisor make the offer for the purpose of a gift or to induce an action • The performance is the consideration and a condition

41. Legislative and Judicial Modifications to Consideration • For example legislation that the person seeking to invalidate the contract lack of consideration; or • A written agreement is presumptive evidence of consideration

42. Reliance as Alternative Consideration • A promise which a promisor should reasonably expect to induce an action or forbearance on the promisee or a third party is binding if injustice can be avoided by enforcement

43. Four Elements for Reliance • Promise • Reasonable expectation to induce or forbear • Actual inducement of action or forbearance • Injustice can be avoided by enforcement

44. Alternative Causes of Action Reliance and Restitution • When breach of contract cannot be sustained • Not based upon a true contract, express or implied in fact • Rather it is Constructive or implied by law or implied in law – Judicial Discretion • Equitable treatment by court

45. Reliance • If a party acts or refrains from act because he or she is relying upon the other party’s encouragement, a reliance interest comes into being. • You do not obtain expectation interest as you do not have a contract

46. Restitution • Implied or Quasi Contract • Quantum Meruit (as much as it is worth) or Unjust Enrichment • Not allowing someone to get a benefit without paying for it

47. Step 2 continuedThe Post-Offer/Pre-Acceptance Phase

48. Acceptance • If the offer is accepted you have a contract • If however it is not accepted…

49. Death of Offer Prior to Acceptance • LapsePrior to acceptance it may expire • Stated time frame in agreement or offer • Reasonable Time - Car Dealership e.g. when leave the showroom • RevocationPrior to acceptance it may be revoked • Effective upon receipt • Can be directly communicated – preferred • Can be indirectly communicated by action

50. Rejection – effective upon receipt Express rejection Counteroffer • Death or incapacity of Offeree or Offeror If the Offeree or Offeror dies or becomes incapacitated prior to acceptance the offer will die