Business law case

You will recall the Home Depot case I mentioned in class the week before the exam. 
You can earn the points by briefing the case – ie extrapolating out the most salient facts, followed by the main legal issue which the court recognized as controlling the case, then pointing out the rule of law the court applied to the facts, then giving a summary of the analysis the court did in making that application. 
This isn’t a case of “the longer the brief, the better the grade.”  It’s a case of “the more thoughtful and well organized the brief, the better the grade.”  The assignment is due for credit next Wednesday. Please type and print and turn in the hard copy. 

Introduction to Contracts
The Agreement: Offer
The Agreement: Acceptance
Consideration
Reality of Consent
© 2010 The McGraw-Hill Companies, Inc. All rights reserved.

Capacity to Contract
Illegality
Writing
Rights of Third Parties
Performance and Remedies
© 2010 The McGraw-Hill Companies, Inc. All rights reserved.

Contracts are agreements made up of big words and little type.
Sam Ewing, quoted in
Saturday Evening Post
May 1993
Introduction to Contracts
© 2010 The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives
Nature of contracts
Basic elements of a contract
Basic contract types
Non-contract obligations
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Not every promise is legally enforceable
But when a set of promises has the status of contract, a person injured by a breach of that contract is entitled to call on the government (courts) to force the breaching party to honor the contract
Contract law is ancient law, but has evolved to reflect social change
Contracts
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(1) agreement (2) between competent parties (3) based on genuine assent of the parties that is (4) supported by consideration, (5) made for a lawful purpose, and (6) in the form required by law, if any
See Figure 1, page 292
Elements of a Contract
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Bilateral contracts: two parties make promises to one another
Unilateral contracts: one party makes a promise
Frequent buyer cards are offers for unilateral contracts; gaining points on the cards accept the offer and create a contract
Contract Concepts and Types
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Valid contract: binding and enforceable agreement
Voidable contract: agreement otherwise binding, but due to circumstances surrounding execution or lack of capacity, may be rejected at option of one party
Void contract: agreement without any legal effect because prohibited by law
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Contract Concepts and Types

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Express contract: agreement of parties manifested by words, written or oral
Implied contract: agreement not shown by words, but by acts and conduct of parties
Difference between express & implied contracts relates to manner of proving the existence of the contract, not the effect; one or the other arises
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Contract Concepts and Types

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Two bodies of law govern contracts:
“Article 2” of Uniform Commercial Code
“Common law” of contracts
Uniform Commercial Code (UCC) is statutory law in every state, but the common law of contracts is evolving
UCC contains nine articles
Sources of Governing Law
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Click to add notes

Article 2 expressly applies to contracts for the sale of goods [2–102] (numbers in brackets refer to specific Code sections)
UCC [1–105]: goods are tangible, movable, personal property
Does not apply to sale of services, intangible property (stocks, intellectual property), or real estate
UCC Article 2
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Many contracts involve goods and services
Test that courts most frequently apply to decide whether Article 2 applies is to ask which element – goods or services – predominates in the contract

The UCC and
Hybrid Contracts
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The UCC or Common Law
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Sometimes the law enforces an obligation to pay for certain losses or benefits even in the absence of mutual agreement and exchange of value; the court then applies:
Quasi-contract theory
Promissory estoppel
Non-Contract Obligations
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Quasi-Contract Theory
Quasi-contract is an obligation imposed by law to prevent unjust enrichment of one party in certain circumstances
E.g., work performed by painter thinking work justified by contract & other party, who receives benefit of work, denies work was justified
E.g., minor buys something but wrecks it, agreement is void by law, but the minor must pay the damages
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Quasi-Contract Remedies
Plaintiff recovers either the reasonable value of the benefit conferred on the defendant (reasonable price) or value of labor (quantum meruit)
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Promissory Estoppel
A court may apply doctrine of promissory estoppel when one party relies upon another party’s promise to his or her detriment (detrimental reliance), but there’s no contract
Court will force promisor to fulfill promise or pay compensation
Example: Holt v. Home Depot, U.S.A., Inc.
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Holt v. Home Depot, U.S.A., Inc.
Facts & Procedural History:
Holt was a Home Depot manager for four years
Home Depot assured employees that an open-door policy allowed complaints to management about supervisors without penalty
Home Depot moved Holt and family to Connecticut, but soon after, Holt began to have difficulties with his immediate supervisor
Holt told a senior manager about the problems
Called Impact Line to begin formal complaint
Six days later, Home Depot fired Holt
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Hyperlink is to the opinion (pdf format) on the court’s website.

Holt v. Home Depot, U.S.A., Inc.
Procedural History:
Holt sued claiming promissory estoppel
Jury found for Holt, awarding $467,000 damages
Appellate Decision and Ruling:
Jury could reasonably find that Home Depot’s promise not to retaliate against employees was so clear and emphatic that Holt could reasonably believe it was inviolable; evidence indicated Holt terminated because of complaint about supervisor
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Review
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Thought Question
What contracts have you entered into recently?
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Opportunity to discuss the contracting each person does almost every day.