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In chapter 8 we learned about the many types of contracts. Some of the contracts we learned about are bilateral contract, unilateral contract, formal contract, informal contract, express contract, implied contract, executed contract, executory contract, valid contract, voidable contract, unenforceable contract, void contract, and quasi contract.
While reading this chapter I realize not all contracts have to be written. For example an informal contract does not require any special form. As long as both parties have a verbal agreement. One contract that does have to be written is a formal contract. Formal contract requires a special form or method of creation. The existence of a written and signed legal document is needed to be enforceable.
According to the text an option contract is created when an offeror promises to hold an offer open for a specified period of time in return for a payment given by the offeree. This contract makes it so that the offeror can no longer revoke an offer for the period of time specified in the option. These types of contracts are frequently used in conjunction with the sale of real estate.
I would also agree with Professor M regarding there being only 3 basic essential elements necessary in every contract. I believe an offer is necessary. An offer is a promise of commitment to perform or refrain from performing some specified act in the future. Next we need acceptance. Acceptance is the act of voluntarily agreeing, through words or conduct, to the terms of an offer, thereby creating a contract. Lastly the textbook defines consideration as the value given in return for a promise. Meaning one party provides something in exchange for something from the other party.
A case I found interesting was Hamer v Sidway 1891. This case demonstrates how a contract does not always have to be in writing. In this case they had a unilateral contract. A type of contract that results when an offer can be accepted only by the offeree’s performance. It is a contract agreement in which an offeror promises to pay after the occurrence of a specific act. In this case Hamer had to stay away from tobacco and alcohol until his 21st birthday in order to get his money. The court ended up ruling in his favor. The court stated “that right he abandoned for a period of years upon the strength of the promise of the testator that for such forbearance he would give him $5,000. We do not speculate on the effort which may have been required to give up the use of those stimulants.”
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As the book states a contract is “a set of promises constituting an agreement between parties, giving each a legal duty to the other and the right to seek a remedy for the breach of the promises or duties.” But there are many different types of contracts that all play a specific role. Contacts are supposed to be written promises stating that you will do what you have agreed to. Although not all contracts are in writing with technology and the power of online work, contracts can be written in digital form.
As you stated that there are only 3 essential elements, I believe that there are four. Including the three you have stated offer, acceptance, consideration, and mutuality of obligations. What is an option contract and is it more than one contract? A contract in which the buyer and seller mutually agree, and which grants the buyer the right to acquire or sell any asset later as specified and no it is not more than one contract.
Punitive damages and tort law comparison:
Yes, punitive damages are permitted in a contract action. I believe that they are permitted because they are meant to hold the perpetrator accountable for their heinous actions and to discourage others from repeating the same behavior. Punitive damages are only granted in exceptional circumstances, often under tort law, where the defendant’s behavior was egregiously devious. These are typically given in excess of the plaintiff’s demonstrable harms. In most cases, contract disputes do not allow for the allocation of punitive damages.
