Street Law

1. Contracts Street Law

2. DO NOW • List the things you think you would need to have in a contract for it to be valid. • Describe a contract that you have been in, or one that you have heard about. What made it a contract?

3. Catching Up • What we have done: Constitutional Law, Criminal Law, Domestic Violence. • Today: Contracts • Next 2 Sessions: Family Law, Torts/Quiz • Mock Trial- Last 5-6 classes will focus on preparing for mock trial where you will either prosecute or defend an alleged murderer.

4. Objectives • Students will be able to list and describe the elements of a contract. • Students will be able to draft versions of written and oral contracts.

5. Overview • Restatement of Contracts definition: A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. • We will focus on 4 topics: • Offer and acceptance • Consideration • Duties and enforcement • Defenses

6. Offer and Acceptance • Offer: Showing a willingness to enter into a bargain in such a way that another person would interpret that they could accept and it would conclude the negotiations. • Can be through words or actions. Advertisements can be offers. • Negotiations are not offers. Buyers have to be able to walk away from estimates or price quotes.

7. Offer and Acceptance • Acceptance- once an offer has been made, the other party can accept the offer in any reasonable way, including starting performance. • The party who accepts can back out up until performance begins. • Factors include: • Were terms finalized? Did performance begin?

8. Practice • Discuss whether there was a valid offer and acceptance with your group. • Explain your answers on your handout. 8 minutes.

9. Practice • 1. Ever-tite v. Green- The court ordered that the homeowner pay for transporting the materials, but not for the roofing itself. • 2. Ciaramella v. RDASince the settlement was just an outline and there were uncertain terms, the court did not enforce it. • 3. Carlil v. Carbonic Smoke Ball- The company did not say the person had to notify of acceptance, so the person’s performance was enough.

10. Consideration • Consideration: A contract must include a promise and a return promise. • It cannot only go in one direction. Both parties have to get something valuable (a good or service). • A promise of a gift is not enforceable because one party gets nothing. • The exchange doesn’t have to be equal- one person may value something more than someone else.

11. Enforcement • Substantial Performance- Doing exactly what is in the contract is not always possible, but the parties have to reasonably live up to the terms. • If one party does not materially perform, the other party no longer has to perform. • Failure to perform is called “breach.”

12. Enforcement • What happens when one party breaches? • Damages- The party who is harmed can request money from the other party equal to the loss from the breach. • Specific performance- If it is still possible to perform the contract, the court can require the party to perform.

13. Practice • Think-Pair-Share • Read the fact pattern on your work sheet to yourself, then spend about 3 minutes explaining whether you think one party breached the contract, and what the court should do, if anything. • Then, you will share with your group for about 5 minutes.

14. Practice • Hawkins v. McGee- The court said that you can recover damages for the difference between what you expected to get in the contract and what you actually got. • In this case, Sam would be able to recover the difference in value between a good hand and a hairy hand. • Doctors and lawyers would work together to determine that value.

15. Defenses • Certain things can make contracts void even though both parties agreed on the terms and there was valuable consideration. • Unconscionability- If one party tricked another party into agreeing to an unfair contract, the court may not enforce it. • Often comes up when businesses try to trick poor or uneducated clients.

16. Defenses • Fraud or Duress- Lying or misrepresenting something in negotiations can make a contract void. • Also, taking advantage of someone in a bad situation can make a contract void. • If a company knows about a flaw in a product and covers it up, the contract to buy it is void.

17. Defenses • Criminality/Public Policy- If the terms of a contract require illegal behavior, or if they go against Congress’ stated goals, it will be declared void.

18. Practice • Practice- Have one member of your table read the following facts out loud, then discuss whether the contract should be declared void for any of the reasons discussed above. 5 minutes. • Discuss the issues, but you are not required to write them down. We will hear each group’s opinion at the end of 5 minutes.

19. Assignment- Drafting a Contract • We will divide into 6 groups. You will have the rest of class to draft a contract. • Each group will get a sample contract, a fact pattern, and will have the choice to draft either an oral or written contract. • For an oral contract, write a dialogue between the parties that would create a valid contract. • For a written contract, use the sample written contract for suggestions.