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									                    CHAPTER 2.
    Enforcing Promises: Bases of Legal Obligation

1. Classical" Contract Law. The decisions of common law judges, the
   refinement and restatement of common law decisional rules as
   expressed in the First Restatement of the Law of Contracts have come
   to be known as "Classical" contract law.
   a. The rules have evolved over time, but recently have come under
        attack by scholars and commentators.
   b. Some would argue that the evolution was periphery and that
        modern contract law has stayed so true to the classical conception
        that it warrants the title "neoclassical" contract law.
2. In the materials that follow, we will be examining this evolution to
   discover that in some substantial respects modern contract law is
   distinct from the classical model.
   a. The starting point for decision-making involving the common law of
        contracts is the "classical" system.
   b. Therefore, it, the "classical" system, will also be the starting point
        of our inquire into the law of contracts.
                        CHAPTER 2.
        Enforcing Promises: Bases of Legal Obligation
1. Promise. Promise is said to the basic element of the common law of
       a. If promise is the basic element of the common law of contracts and
           the bases for imposing liability when they are made, what makes
           some promises legally enforceable and others not?
       b. The law must find some test that, when applied, would enable us
           to distinguish between those promises that the law will or should
           enforce and those which the law will or should not.
       c. The test could be one of form, as with the seal, or some other
                CHAPTER 2.
Enforcing Promises: Bases of Legal Obligation

d. The test could be something substantive. The possibilities include:
   1. Private Autonomy. The law views private individuals as
      possessing the power to change their legal relations with
      respect to each other. The person who enters into a contract is
      exercising this right.
      a. What act or acts will the law recognize as the exercise of
           that right so that liability between the parties is created?
   2. Reliance. The second substantive basis of contract liability it
      based on the notion that a party may rely on the expectation
      that the promise will be performed, and change his or her
      position to their detriment as a result.
   3. Unjust Enrichment. Where one of the parties has conferred a
      benefit on the other(money) in reliance of the other party’s
      promise to deliver goods. The breach enables the promissor to
      retain the benefit and would therefore be unjustly enriched.
                CHAPTER 2.
Enforcing Promises: Bases of Legal Obligation

e. Is it necessary for the maker of a promise to actually intend to be
   legally bound to perform in order for the promissee to enforce the
   promise? We will first consider the issue of intent.
f. Is there anything else necessary for enforcement. We will study
   three grounds.
   1. Consideration (Private Autonomy?). Giving something in
   2. Reliance on the promise (Promissory Estoppel).
   3. Unjust Enrichment (Restitution).
                         CHAPTER 2.
         Enforcing Promises: Bases of Legal Obligation
                       A. INTENTION TO BE BOUND:
1. The primary concept in the following materials, mutual assent, reflects
   the common law's devotion to the freedom of contract model.
2. The notion of “freedom of contract” is premised on the classical theorists
   conception of law.
   a. Contract law involves the private sphere. The object of contract is
       the fulfillment of the expectation of the individual parties.
       1. Contract is a voluntary (consensual) association between parties
       2. Mutual assent is the expression of the individuals' will to
           bind themselves in mutual responsibility.
       3. If contractual liability results because of judges’ reliance on public
           policy or community norms, is this an expression of individual
           freedom or private autonomy?
       4. Contract formation based on community norms is the antithesis
           of an expression of individual freedom and the notion that
           contracts law falls within the private sphere.
       5. Mutual assent is a central concept of contracts law.
                    CHAPTER 2.
    Enforcing Promises: Bases of Legal Obligation
                  A. INTENTION TO BE BOUND:
b. The Objective Theory of Contract
   1. If in fact contract law stresses expression of commitment as a basis
      for enforceable legal obligations, wouldn’t mutual assent call for an
      actual meeting of the minds?
   2. Does the notion that mutual assent is based on objective theory of
      contract move contract law into the public sphere?
   3. Is the following statement by Justice Homes consistent with the
      classical theorists belief in private autonomy? “The law has
      nothing to do with the actual state of the parties minds. In
      contract, as elsewhere, it must go by externals, and judge
      parties by their conduct”
   4. Ray v. William G. Eurice & Bros, Inc.
   5. Park 100 Investors, Inc. v. Kartes

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