Harvardx ContractsX 2016

What is a contract?

co ordination. free men and women.

Communication, Agreement, Understanding, and Trust

Communication, Agreement, Understanding, and Trust

how do you bring about co ordination. through

ladder of trust
planning is co ordination with time
commitment and promise

Dead Weight loss in economics is a scenario of loss of economic efficiency , which occurs when the equilibrium for a good or service is not achieved or not achievable.

if a certain tax is imposed on the producer for each unit of the good he sells, it is likely that the new equilibrium price that is settled for the transaction will be higher and therefore some burden of this will be passed on to the consumer. This will lead to reduced trade from both sides.

promise. When and How Money was invented.

i think the dead weight losses is that your unable to perform some activity
building contracts through trust , promise , money and credit

You dont have money, but you think you will have money in future. dead weight loss meaning you cannot accomplish something now . credit removes the dead weight problem. contract allow us to avoid the dead weight loss and to have more effective society. we can depend on people that we dont know and dont trust. good governance citizens trust each other even though they are strangers, they become civic friends.

contracts are promises,
promises are commitments
there is got to be trust.

not every promise is a contract.
4 situations that are not a contract.

invitation to dinner.
i made a promise that i will turn up for the dinner at portia ,but i dont, i dont even call to inform that i will be not be coming. portia is really angry and decides to sue me. Portia is going to lose because invitation to dinner is informal friendly occasion.

1)is the party intended to create a legal relations?
2)both parties know that the promise is a joke, when neither side takes it seriously well, thats just not the kind of situation Gov’t wants to be hauled into.
it was a frolic and a banter

frolic = cheerful
banter = playful exchange

3 Pepsi had a promotional campaign. Pepsi points you can buy stuff. harrier jet for 7 million points. but Pepsi says i am sorry you dont. understand that was not meant to be a serious offer. sue Pepsi to force Pepsi give them the harrier jet. they go from one court to another.from Florida to new York.

plaintiff insistence that the commercial appears to be serious offer requires the court to explain why the commercial is funny. explaining why a joke is funny is a daunting task.

as the essayist EB white has remarked “Humor can be dissected as a frog can
but the thing dies in the process”the commercial is the embodiment of what defendant appropriately characterizes as zany humor in light of the obvious absurdity of the commercial the court rejects plaintiff’s argument that the commercial was not
clearly in jest

Girl friend says that if you give me the house, take me to trips, buy me some jewelry , then I will never call you at work, or at home. they both sign what looks like contract. and this is in fact looks like a real contract there is real money involved.

Despite of all of that the court threw this out.
court do not want to involve in personal matters like between married man and his girl friend. that is immoral and it is shoddy. illegal or a Immoral contract. This is really just a Gift. Promising to make a gift. We dont have a real bargain. Because he had
said that I dont care, I did not ask for that, You just put put that in there.

Law ignores promises that are not part of the bargain.It was nothing more than
a promise to make a gift.

promise to make a gift.
1 no intent
1 jokes
3 legal and moral
4 gift , no bargain

Bargains , exchanges etc
No enforcement of purely informal relations
If it is Bargain, the law does not care if it is a good bargain or fair bargain.

Case B is a simple promise to make a gift. Michael is neither giving nor doing anything to receive the spending money, and Mickey could stop giving it to him whenever he wanted. This is not a bargain that a court would enforce.

Case C is not an enforceable bargain, as the granddaughter is not giving anything in exchange for the grandfather’s promise. However, as you will see later in the course, the grandfather’s promise will be upheld under another theory, detrimental reliance. But, for now, we say that it is a promise to make a gift and is thus unenforceable.

law does not enforce a promise of gift.

Uncle Promise

when you reach the age of 21 on condition that in the next few years,before you are 21, you don’t drink, you don’t smoke, you don’t swear, and you don’t gamble.Well, the nephew keeps to these terms all that time. He doesn’t smoke, drink, gamble.And come 21, he wants his money. Now, may I say in the meanwhile, the good hearted uncle had died.

This is not a gift, there is a Bargain.

He had a right, particularly back in those days to smoke, drink, swear, and gamble. And he gave that up, because the uncle had promised him The uncle wanted it, and the uncle asked for it.And the uncle got it.
That’s right. because the nephew never promised that he wouldn’t smoke, drink,swear, or gamble. The uncle promised that if the nephew didn’t do those things,

exchange of something for nothing.So Batsakis was taking a risk.
And for that risk, he was being compensated.So there was a real bargain.

being on the high seas,it comes under something called the admiralty jurisdiction.
so it is a federal case.

That rule says that if you come upon a ship in distress and you take on its cargo, you are entitled to salvage.You get a reward.You’re entitled to salvage, and you’re entitled to a reasonable freight for carrying that cargo to shore.

But you don’t just pick up this distressed cargo as if it were somehow abandoned in the middle of the ocean and you came upon it, finders keepers losers weepers.No.

And the reward is one half the value of the salvage goods.the freight, whatever the usual freight is, from the Bering Sea to Sag Harbor.
Today, you have a rule which goes by the name of general average. And the general average is what you do in a situation like this.You figure out what the total value of the cargo of the ship was. Let’s say the total value was worth $1,000. What you did is you had to throw $300 worth of cargo overboard. $300 worth of stone or blocks of marble. to save the remaining cargo of silk and spices.

Under the law of the sea, the owners of all the cargo get together under what’s called general average and each of them ends up with 7/10 of the value of the total cargo.

Although this exchange looks a bit like the one in Batsakis v. Demotsis, there are two major things that distinguish the cases. First, in Batsakis, the difficulties that caused Demotsis to enter the deal were through no fault of either party–it was due to the external conflict in Greece. In contrast, in the Car Accident, her boyfriend had caused the difficulties that led her to make the deal. Second, although the exchange in Batsakis appeared unequal, the court allowed it because Batsakis was taking on the risk that he would never be repaid, so the difference in value was seen as compensating him for the risk he was taking on. In this case, the defendants didn’t take on any risk to account for the discrepancy in values, so there was no additional value for her to get out of the exchange. In fact, the fact that she could have sold the annuity to anyone else for its present value of $189,000 made the circumstances look extremely suspect. This gross disparity in values makes the contract unconscionable and thus unenforceable.
Because the crew gave nothing that they hadn’t already given once in the earlier promise before they left San Francisco.They tried to sell the same thing twice.The company had already bought their promise to work.Does it matter that the company agreed on the $100,only because they did not want to lose the whole season?He trusted the workers, went out on a limb with them.And once in Alaska, they had the company over a barrel.
That’s what’s called a mixed metaphor.

This situation is analogous to Alaska Packers because Alfred and Betty have formed a contract when Betty calls to buy the car and Alfred accepts her offer. By threatening to leave Betty stranded in the desert at nightfall unless she agrees to an increased price, Alfred essentially has her over a barrel and sells her the same thing twice, similar to the workers in Alaska Packers.

This situation is similar to Alaska Packers because Alfred and Betty create a contract when Betty accepts Alfred’s original offer by telling him she’ll pay and pick up the car on Wednesday. So when he demands the higher price, Alfred sells the same thing twice, knowing he has Betty over a barrel because she has sold her old car to be able to pay for his.

One Sided promise is not bound by the law as it is not a bargain.
Now if they leave out, “we will consider it,” they won’t have been able to bind you.

In (C), the model exchanged her exclusive submission for the agency’s promise to review her file, creating an enforceable contract.
In (D), the agency’s offer to take the model to dinner was intended to be consideration to keep the option open, which creates an enforceable contract.

lack of mutuality.
She promised him the exclusive, and he promised to make the best efforts to commercialize her name.
but implicit– that’s the big word– implicit in the transaction.

Promise given for something .

It is best that the promise be part of a bargain.
Offeror is Master of the Bargain.

Contracts yes or no


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