Final Outline - Business Law

Chapter 1

2. Source of commercial law

• Common law K: covers variety of things, including sales of services.
• Louisiana law is covered in “ conventional obligations” under the LCC and covers all sorts of Ks
• Article 2 of uniform commercial code (UCC) governs sale and leases of goods (2A).

• a sale is the passing the title of goods from seller to buyer.
• Goods are movable and tangible

3. Classification of K:

• Bilateral K: two promises, a promise for a promise. Unilateral K: one promise
• Unilateral K: a promise for performance.

• The offeror promises something to the offeree, who gives a promise in return
• No performance is required fro the K to be formed
• It comes to existence when the promises are exchanged.

4.  Unilateral K: a promise for performance.

• Offeree can accept the offer  only by completing the K performance. K comes into existence when K is performed. 
• Incomplete or partial performance: K can be revoked anytime by offeror any time before the offeree’s performace, unless the offeree has already begun or substantially completed the performance.

6. Formal and informal K

Formal Ks: 4 kinds, require a special form or method of creation to be enforceable

• negotiable instrument: checks, drafts, notes, CDs;
• letter of credit: the issuer paus a designated sum upon receipt of the required documents
• recognizance: party pays bond; to gurantee performance
• Ks under seal.

8. K classification

• Valid K; all elements to contract are present

• An agreement consisting of offer and acceptance must exist
• the K must be supported by legally sufficient consideration
• The parties to the K must have legal capacity to enter into K
• The K must be made for a legal purpose or object

• Voidable K: valid K that is voidable at the option of one or both of the parties; this occurs when there is a element of contract missing, like capacity (i.e., being a minor)
• A typical example: Ks with minors and others who lack capacity

• lf one party avoids the K, both are released from performance
• lf the party who COULD avoid the K ratifies (accepts upon

• Void Ks: neverhad any legal validity; some important elements missing ( dress and fraud are good example of viod “Ks”)

• unenforceable Ks: at one time the K was legally forcible, but it has  now rendered unenforceable

1. Express Ks and implied Ks

• Express Ks: fully and explicitly stated orally or writing.
• Implied Ks (implied in fact): by behaviors of the parties;

• requirement:

Plaintiff finished some service or property to defendant,

Plaintiff expected to be paid and defendant knew or should have known,

The defendant had a chance to reject

1. Quasi Ks: not actual Ks, fictional Ks created by court, interests of fairness and justice (implied at law).

The doctrine of unjust enrichment: no one should be allowed to profit themselves inequitably at others’ expense