with particular reference to the statute that pervades contract law, Article 2 of the Uniform Commercial Code (UCC). Chapter 3 concentrates on the nature and composition of judicial opinions and on the method of analyzing and gleaning legal rules from them. Its primary purpose is to explain the doctrine of precedent as it applies in contract law and in our legal system as a whole. The Examples in Chapter 3 offer a specimen opinion, constructed to provide an exercise in reading, understanding, and applying the precedent of a judicial decision. Because contract law is commonly taught through the study of court decisions, you will become familiar with the methodology of case analysis as you use it throughout the contracts course. However, Chapter 3 provides an early opportunity for you to focus on and to begin to understand how to approach caselaw and case analysis.
By the time they reach law school, most people have a good idea of what a contract is. Nevertheless, lay usage of a legal term such as “contract” is likely to be less exacting than the legal definition, and so we must begin by defining and describing the elements of contract. It is not easy to provide a simple and accurate definition of a legal relationship as complex as contract, and the following definition is necessarily an oversimplification. However, it serves as a starting point for discussion and allows us to focus on the crucial elements of the relationship.
A contract may be defined as an exchange relationship created by oral or written agreement between two or more persons, containing at least one promise, and recognized in law as enforceable. This definition reflects several essential elements:
An oral or written agreement between two or more persons
An exchange relationship
At least one promise
The central concept of each of these elements is introduced below and will be returned to in greater detail later in the book.