An Introduction to the Legal System of the United States, Fourth Edition by E. Allan Farnsworth

Author:E. Allan Farnsworth [Farnsworth, E. Allan]
Language: eng
Format: epub
Publisher: Oxford University Press
Published: 2010-06-16T22:00:00+00:00

CHARACTERISTICS

A contract may be defined as a promise for the breach of which the law gives a remedy,4 though the word “contract” may also be used to refer to the agreement of the parties itself or to the document that the parties executed. Not all promises are enforceable, and several criteria must be met before the law will give a remedy for breach of a promise. Two of the most fundamental of these are the requirement of a writing that will memorialize, and later be used to prove, some types of contracts (though not all contracts require a writing) and the requirement of consideration, which is a condition of all enforceable contracts.

The requirement of a writing is imposed by the statutes of frauds, derived from the English Statute of Frauds of 1677, which have been enacted throughout the United States. Typically, they provide that, with some exceptions, specified kinds of contracts are unenforceable unless evidenced by a writing.5 The most common kinds of contracts covered by these statutes are contracts between merchants to sell goods,6 contracts to sell land, contracts of suretyship, and contracts not to be performed within a year.7 Many agreements, such as most contracts to furnish services or to sell personal property, are not included, and such oral contracts are enforceable even though there is no writing. But despite the repeal of most of the English Statute of Frauds in 1954, there has been no widespread movement for complete abolition of the statute in the United States.

Apart from any requirement of a writing, a promise is not generally enforceable in the United States unless it is supported by consideration.8 Consideration is something (e.g., a promise by the promisee or an act such as a payment or a service) for which the promisor has bargained and that the promisor expects to receive in exchange for the promisor’s promise.9 But a gratuitous promise, a promise to do something for nothing in return (including a promise to pay for goods or services which have already been furnished at the time the promise is made), is not supported by consideration. A gratuitous promise may, however, become binding if the promisee relies on it under a principle often referred to as “promissory estoppel.”

Fortunately, there are only a few instances of business promises in which the requirement of consideration is not met. One of the most troublesome involves the “firm offer” (i.e., an irrevocable offer). The traditional rule in the United States is that an offeror can revoke the offer at any time before its acceptance, and a promise by the offeror not to revoke is not generally effective unless supported by consideration. A common device for holding the offeror to such a promise is the payment to the offeror of a nominal sum, for example one dollar,10 as consideration for what is then known as an “option.” (The payment is made by the offeree.) Under the Uniform Commercial Code, an offeror can make an irrevocable offer to buy or sell goods simply by putting it in a signed writing that states that it is irrevocable.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.