Contract Law
What makes a promise enforceable
Sue someone for breaking a promise and the court’s first question is not whether they broke it. It is whether the promise was one the law would enforce at all. Most are not. This reading walks the line contract law draws: how an agreement forms, what happens when a side walks away, and why the terms you clicked past may or may not reach you.
A contract is an agreement that creates duties a court will enforce. The whole subject fits in three phases. Formation asks whether a contract came into being. Performance asks whether each side did what it promised. Remedies asks what a court does when one side did not. Cornell’s Wex overview of contract (opens in a new tab) sets out the elements and the remedies in that order. Begin with formation, because where no contract formed there is no duty, and with no duty there is nothing to breach.
Formation: how a deal comes together
Four elements have to line up, and any one of them can sink the deal on its own.
A contract starts with an offer, a proposal on stated terms, definite enough that a court could say what was promised. “I’ll sell you my 2014 Civic for $4,000 cash this Saturday” is an offer. “I might sell the Civic sometime” is not, and neither is a dealer’s ad promising big savings this weekend, which invites you in to negotiate. The test is whether a judge reading the words could tell what deal was on the table.
Acceptance answers the offer in the way the offer allows. Words do it. A signature does it. So does conduct: clicking a button, or simply performing the act the offer asked for. What acceptance cannot do is rewrite the terms. Answer that $4,000 offer with $3,500 and you have accepted nothing. You have made an offer of your own, and the first one is off the table.
Consideration is the price of the bargain: something of value each side gives or promises in exchange for what the other gives. Without it the law sees a gift promise, and it will not enforce one. The value does not have to be money. In Hamer v. Sidway, an uncle promised his nephew $5,000 to stay off liquor, tobacco, swearing, and cards for money until he turned twenty-one. The nephew did it, and New York’s Court of Appeals enforced the promise. Giving up a legal right you were free to exercise is consideration, and the court would not ask whether the uncle gained anything tangible. The Wex entry on consideration (opens in a new tab) works through the point students most often miss.
The last element is mutual assent, often called a “meeting of the minds.” The phrase misleads. Courts do not go looking inside anyone’s mind; they ask what a reasonable person would take from the parties’ words and conduct. That is the objective theory of assent, and Lucy v. Zehmer is where you watch it work. Zehmer wrote out a sale of his 471-acre farm for $50,000 on the back of a restaurant check and signed it, and his wife signed too. Later he swore he had been joking and drinking. The Virginia court enforced the sale anyway, holding that mental assent is not required to form a contract. Everything Zehmer did outwardly looked like a man closing a deal.
Quick check: how a contract forms
Five questions on offer, acceptance, consideration, and mutual assent. Pick one answer each.
Which of these is a valid offer?
Consideration is best described as:
Why will a court enforce a bargain but not a promise to give a pure gift?
Courts decide mutual assent by looking at:
In Lucy v. Zehmer, the objective theory of assent meant that:
When a deal breaks
Performance comes due, and the question turns to whether each side delivered. A breach is a failure to perform a contractual duty when performance is due, with no legal excuse. Not every shortfall qualifies. In Jacob & Youngs v. Kent, a builder finished a $77,000 country house with pipe from the wrong factory, an oversight by a subcontractor. Tearing out finished walls to swap it would have cost a fortune. Cardozo let the builder recover the unpaid balance. A party who performs in good faith and misses by a trivial detail has substantially performed, and the owner’s allowance is the difference in value rather than the cost of demolition.
That allowance is a remedy, the relief a court gives the non-breaching party to make up for the breach. Money damages are the standard, measured to put the injured party where performance would have left them. Hawkins v. McGee shows how strictly that is meant. A surgeon promised a boy a “hundred per cent perfect hand,” then grafted skin from the boy’s chest onto his burned palm. The New Hampshire court held the jury should not have been told to award pain and suffering. The measure was the gap between the hand the boy was promised and the hand he got. Less often a court orders specific performance, making the breaching party do what it promised. Zehmer had to convey the farm, because no amount of money buys that particular 471 acres.
Quick check: breach and remedies
Four questions on what counts as a breach and what a court does about it. Pick one answer each.
A breach of contract is:
The most common remedy for breach of contract is:
A court is most likely to order specific performance when:
The purpose of contract damages is to:
The agreement you already signed
Now take the doctrine to a screen. Every time you tap “I Agree,” a company is trying to form a contract with you, and courts sort those attempts into the clickwrap and browsewrap pair. A clickwrap makes you act: check the box, click the button, and only then proceed. Your assent is on the record. A browsewrap posts the terms somewhere on the site and treats your continued use as agreement. Courts often refuse to enforce one, because a user who never saw the terms never assented to them. That is the objective theory again, applied to a webpage.
Specht v. Netscape Communications Corp. is your benchmark. Users downloaded free software by clicking a button, and the license terms, including an arbitration clause, sat on a screen below the button, reachable only by scrolling. The Second Circuit held that a reasonably prudent user would not have learned of those terms before downloading (opens in a new tab), so the download did not show assent to them. Notice design decided the case. Where a company puts the terms, and what it makes you do about them, is the whole fight.
Quick check: the agreement on the screen
Four questions on clickwrap, browsewrap, and online assent. Pick one answer each.
A clickwrap agreement differs from a browsewrap because it:
Courts often refuse to enforce a browsewrap because:
Specht v. Netscape stands for the idea that:
Applying the objective theory to a webpage, your acceptance is clearest when you:
In the activity you map the doctrine yourself and brief one case from the canon in your own words. Then you open the Terms of Service for an app you already use and decide whether that agreement would survive a challenge. You also check the AI’s rules and citations against a primary source. A model will name a case that does not exist in the same steady tone it uses for a real one. Start with the elements. Everything else on that screen is downstream of whether an agreement formed at all.