1. Project Management & Contract Law项目管理和合同法Trainer: Herb brook
Interpret: Richard guo
2. Outline(大纲)Legal System Layers
法定体系层
Sources of Law
法的来源
Contracts
合同
3. Legal system layersSanctions
Sample ConductCode of EthicsNo formal penaltyFailure to report moonlightingProfessional MisconductDisciplinary actionMoonlighting for competitorTort LawCompensation to othersSlanderContract LawCompensation to clientBreach of contractCriminal LawPunishment (Jail)Breach of criminal codeAs conduct worsens the severity of the sanctions increase
7. Legislative lawDetermined by legislatures (US Congress and State Legislatures)
Consists of
Statutes
Professional Engineering Licensing Laws (States)
Occupational Health and Safety Act (US)
Regulations
Created by organizations like the Society of Professional Engineers.
9. Common LawJudge-Made Law
Based on the theory of Precedent
Contract DisputeLegal RulingPrecedentPrecedent - a legal principle established in previous court decisions
which involved similar or analogous fact situations.
11. Precedent Example - Fundamental BreachMay be applied to render exemption clauses in contracts ineffective.
Case History
Harbutt Plaasticine v. Wayne Tank & Pump (1970). Factory burned down due to faulty material. $2,300limitied liability in contract was waived and $170,000 paid.
Precedent - in the event of fundamental breach (a breach of such nature as to go to the very root of the contract)an exmption clause in a contract would not afford protection to the party that committed the breach
12. 先例案例 - 根本性的违约可能应用于解释无效合同中的免除条款.
案例历史
Harbutt Plaasticine v. Wayne Tank & Pump (1970). 由于不合格材料导致工厂被烧毁。合同中$2,300的有限责任被放弃,赔偿了 $170,000。
先例 --根本上违反合同中的免除条款(该违反涉及到合同中的根本性问题)不能对违反条款方提供保护。
13. The Theory of Deep PocketsThe purpose of Contract Lawis to compensate wronged parties for their damages (not for punishment)
Therefore, legal action will tend to be made against those with the greatest capacity to pay.
15. Contract LawDefinition
relationship between 2 or more people defining rights and obligations
5 Essential Elements of Enforceability
Offer and Acceptance
Mutual Intent
Aconsideration was paid (If not, then the contract is an “agreement”.
Capacity (18 yrs of age, sound mind, capable)
Lawful Purpose
17. Bilateral vs. Unilateral ContractsEvery contract involves at least two parties: an offeror and an offeree. The offeror promises to do or not to do something. Whether a contract is unilateral or bilateral depends on what the offeree must do to accept.
A bilateral contract is a promise for a promise; if the offeree need only promise to perform, the contract is bilateral.
A unilateral contract is a promise for an act; if the offeree can accept only by complete performance, the contract is unilateral. A unilateral contract's offer becomes irrevocable once substantial performance has been completed.
19. Expressed vs. Implied ContractsAn express contract is one in which the terms are expressed in words, oral or written, A contract that is implied from the conduct of the parties is an iniplied-in-fact contract, or simply an implied contract. The parties' conduct reveals that they intended to form a contract and creates and defines its terms.
To establish an implied-in-fact contract: (1) the plaintiff must have furnished some service or property; (2) the plaintiff must have expected to be paid and the defendant knew or should have known that payment was expected; and (3) the defendant had a chance to reject the service or property and did not.
21. Formal vs. Informal ContractsFormal contracts require a special form or method of formation to be enforceable. Formal contracts include contracts under seal, which are writings with a special sea] attached.
All other contracts are informal contracts, or simple contracts. For these, no special form is required (except for certain types; of contracts that must be in writing).
23. Executed vs. Executory ContractsContracts are also classified according to their stage of performance. A contract that has been performed is an executed contract. A contract that has riot been performed is an executory contract.
If one party has fully performed but the other has not, the contract is said to be executed on the one side and executory on the other, and it is classified as executory.
25. VALID, VOID, VOIDABLE, AND UNENFORCEABLE CONTRACTSA valid contract results when all of the elements necessary to contract formation exist-when th parties agree, through an offer and an acceptance, to form a contract; the contract is supported by consideration; the contract is for a legal purpose; and the parties had legal capacity to contract,
A contract that is void is no contract. A void contract gives rise to no legal obligation on the part d any party. An illegal contract is, for example, a void contract,
A voidable contract is a valid contract in which one or both of the parties has the option of avoiding his or her legal obligation. If the contract is avoided, both parties are released. If it is ratified, both parties must perform
An unenforceable contract is a valid contract that cannot be enforced due to certain defenses. For example, a valid contract barred by a statute of limitations is an unenforceable contract.
27. Excuses for non-performance of a ContractMisrepresentation (false statement or assertion of fact)
Innocent - didn’t know they were lying
Fraudulant - knowingly
Duress - induced by means of intimidation (coercion)
Undue Influence - one party to a contract dominates the free will of the other party.
29. MistakesOften happens with submission of bids
Rectification
of a “common mistake” (secretarial or recording in nature)
Unilateral Mistake - made by 1 party
example...
31. Unilateral MistakeSuppose you are bidding on a construction contract and make an incorrect transfer from a summary sheet such that your bid (submitted under seal for 60 days) is $70,000 lower than you intended.
After 30 days, you discover your mistake and attempt to withdraw the bid. The client understands that you made a mistake but after 50 days accepts your bid.
Should you be required to honor the bid?
33. Contract Interpretation PrinciplesTHE PLAIN MEANING RULE (ALSO KNOWN AS PAROL EVIDENCE RULE)
- When a contract is in writing that is not subject to conflicting meanings, a court will enforce the writing according to its plain meaning. Under this plain meaning rule, the meaning of the words must be determined from the face of the instrument-a court cannot consider evidence extrinsic to the document.
35. Contract Interpretation PrinciplesReasonable Meanings and Implied terms
It is impossible to write everything down
Contra Proferentum
Interpretation of unclear statements will go against the party responsible for writing them.
37. AmbiguitiesWhen the writing is ambiguous, a court will interpret the language to give effect to the parties' intent as expressed in their contract. A court will not make or remake a contract nor interpret the language according to what the parties claim their intent was when they made it. In interpreting ambiguities, the following rules are generally applied:
39. Ambiguities1. A reasonable, lawful, and effective meaning will be given to all of a contract's terms.
2. A contract will be interpreted as a whole; individual clauses will be considered subordinate to the contract's general intent. Ali writings that are part of the same transaction will be interpreted together, although terms that were negotiated separately will be given greater consideration than standardized terms and terms that were not negotiated separately.
41. Ambiguities3. A word will be given its ordinary, commonly accepted meaning, and a technical word or term will be given its technical meaning, unless the parties clearly intended something else.
4. Specific and exact wording will be given greater consideration than general language.
5. Written or typewritten terms prevail over printed ones.
43. Ambiguities6. When the language used has more than one meaning, it will be interpreted against the party who drafted the contract.
7. When evidence of trade usage, prior dealings between the parties, and previous course of performance under the contract is admitted, what each of the parties does in pursuance of the contract will be interpreted as consistent with what the other does and with any relevant usage of trade and course of dealing and performance.
45. AmbiguitiesIn the above circumstances, express terms are given the greatest weight, followed by course of performance, course of dealing, and usage of trade, in that order. When considering custom and usage, a court will look at the customs and usage of trade of the particular business and the locale where the contract was made or is to be performed
47. Contract Interpretation PrinciplesDuty to Mitigate
A party that suffers a loss due to a breach of contract must take reasonable steps to reduce the amount of damages suffered
Liquidated damages (Penalty Clauses)
Must be based on genuine pre-estimates of damages (Rule is to compensate, not punish)
Quantum Meruit
When price is not an express term of the contract then amount is determined by - as much as is reasonably deserved
49. Contract Interpretation PrinciplesSpecific Performance
To remedy a dispute, court may require a party to a contract to perform a contractual obligation.
Usually occurs in contracts concerning the sale of property
Injunction
A court order that restrains or prohibits a party from the performance of some act.
51. Contract ExampleYou work for a California-based engineering firm. Your employment contract stated that, for a period of 5 years after the termination of employment, you would not practise professional engineering anywhere within your city limits for 5 years.
During your time with the firm you developed an excellent reputation and made some excellent business contacts.
After 3 years you terminated your contract and opened your own consulting firm on the other side of the city. Your former firm sought to court action for an injunction, claiming that you had breached the employment contract.
Do you think the judge should grant the injunction?