American Contract Law for a Global Age, 2017a

Unit 1
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INTRODUCTION TO CONTRACT LAW
Part One
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Thinking like a Transactional Lawyer
Welcome to Contracts. While a year ago you might have thought that a “tort”
was a kind of fruity pastry, most students enter law school with some idea of what a
contract is. If we asked you to close your eyes and imagine a contract, what would you
see? Maybe you would imagine an old, musty document like the one the dwarves
persuaded Bilbo Baggins to sign in the movie, The Hobbit: An Unexpected Journey.
You might think of a stack of “closing” papers signed by corporate executives
completing a multi-billion dollar merger. Or maybe you are reminded of an apartment
lease, your internet service provider agreement, or that document the plumber had
you sign before fixing your sink.
Promises the Law Will Enforce. As you will discover in this course, a contract
need not be a written document at all. 1 Oral contracts are not only enforceable but
are in fact ubiquitous. If there is a written document, is that piece of paper the
contract? Or is it just evidence that a contract was made? And what’s the difference
between those concepts? If the contract is not necessarily the piece of paper, what is
it? On second thought, are you confident that you know what a contract is? We had
better fix that.
One common definition of a contract is that it is (1) a promise (or a set of
promises) that (2) the law (3) will enforce. 2 To “enforce” the contract means to
compel the person making the promise (the “promisor”) to either perform it or to pay
damages for failing to do so. Enforcement by “the law” means that it will be done by
duly authorized agencies of the government through the court system, 3 and not by
1 Except when, for certain reasons in certain cases, the law requires a writing. At this point
you should start getting used to the idea that there are very few flat statements about contract law
that do not have exceptions. And, sometimes, the exceptions have exceptions.
2 See, e.g., RESTATEMENT (SECOND) OF CONTRACTS § 1 (1981).
3 Actually, enforcement can be a little more complicated in that it isn’t only through the court
system. Sometimes parties contractually agree to have a private arbitrator decide their dispute.
Parties also sometimes have “self-help” means of enforcement. We will frequently refer to what
“courts” and “the court system” do with regard to contracts, but we don’t mean to exclude other players
in a complex legal system. We’ve just read so many judicial opinions over the years that we sometimes
can’t stop ourselves from talking about courts. (Note: We are only the first unit, and you already should
be figuring out that almost every general statement about contract law requires qualification. That,
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UNIT 1: THINKING LIKE A TRANSACTIONAL LAWYER 3