Part 3- Contracts, Chapter 9: Intellectual Property and Unfair Competition, Doc 3

Summary of Key Concepts in Contract Law and Relevant Case Rulings Contract Law Basics and Classifications   Essentials of a Contract: A valid contract requires an offer, acceptance, consideration (exchange of value), and the intention to create a binding agreement. Types of Contracts: o Bilateral: Mutual promises create reciprocal obligations (e.g., a promise to sell in exchange for a promise to pay). o Unilateral: One party’s offer can only be accepted by performing a specific act (e.g., a reward for completing a task). o Express and Implied: Express contracts are clearly stated in words; implied contracts are formed by the behavior of the parties. o Void, Voidable, and Unenforceable Contracts: A void contract has no legal effect (e.g., illegal contracts); voidable contracts can be canceled by one party due to conditions like fraud or duress; unenforceable contracts are valid but cannot be enforced due to specific legal defenses (e.g., statute of frauds). The Uniform Commercial Code (UCC) and Common Law    UCC vs. Common Law: The UCC, specifically Article 2, governs contracts involving the sale of goods (tangible, movable property) and generally allows for more flexibility, focusing on fairness and reasonable expectations. Contracts for services or real estate are governed by common law. Hybrid Contracts: When contracts involve both goods and services, courts apply the "predominant purpose" test to decide if the UCC or common law applies. International Contract Law: The CISG is a parallel body to the UCC for international goods sales. Parties often use choice-of-law and arbitration clauses to mitigate disputes over applicable laws. Noncontract Obligations   Quasi-Contract (Unjust Enrichment): Imposes a duty to pay for benefits received even without an agreement, to prevent unjust enrichment. For quasi-contract liability, the benefit must be knowingly accepted under conditions where it would be unfair to retain it without payment. Promissory Estoppel: Can enforce promises without a contract if one party reasonably relies on a promise to their detriment and injustice can only be avoided by enforcing it. Case Summaries and Applications 1. Lambert v. Barron (2008)    Facts: Lambert claimed he had a verbal contract to provide consulting services for Barron, a friend. However, Barron never expressly agreed to Lambert’s consulting terms. Holding: The court found no enforceable contract, as the agreement was based on an informal friendship rather than a clear mutual agreement. Significance: This case highlights the necessity of clear acceptance and mutual consent for contract formation, particularly in informal or personal settings. 2. Olé Mexican Foods, Inc. v. Hanson Staple Company (2009)    Facts: Olé and Hanson had a settlement agreement involving the sale of packaging goods amidst litigation. The court had to determine if the UCC applied to the transaction. Holding: The court ruled that the UCC did not apply because the agreement's primary purpose was litigation settlement rather than a straightforward goods sale. Significance: Establishes that in hybrid contracts, the UCC applies only if the sale of goods is the dominant purpose of the agreement. 3. Palese v. Delaware State Lottery Office (2006)    Facts: Palese claimed a lottery prize using a play slip after his ticket was destroyed, but the Delaware Lottery required the actual ticket to validate the win. Holding: The court dismissed the claim, emphasizing the strict requirement to produce the physical ticket as per lottery rules. Significance: This case underscores that quasi-contract claims (e.g., for unjust enrichment) cannot override express requirements when a formal contract or legal rule applies. Ethical Considerations in Contracts Ethics often play a role in contract enforcement. In cases like scholarships or benefits communicated to induce reliance, institutions or companies may face ethical scrutiny if they change terms after the fact, especially if individuals relied on those initial terms when making significant life decisions. This overview provides a foundation in contract essentials, the distinction between UCC and common law application, and specific cases illustrating quasi-contract principles and UCC applicability in hybrid agreements.