Terms

     Contracts consist of terms.  Review Commentary.Introductory vocabulary and concepts.  Promises made by one or both of the parties are the most obvious type of term, describing the performance obligations of each party and the time at which the performance is to occur.  You have already learned something about promises in your study of the topic of consideration.  Conditions to performance are another fundamental type of term, describing events that either trigger or excuse a party's obligation to perform.  We will learn more about both promises and conditions shortly.  See Commentary.Promises and conditions.  Before doing so, however, there are some important preliminary topics to consider. 

     First we consider where terms originate.  Obviously, when an agreement is expressed orally or in writing, the words used by the parties in either their written or oral expression are the source of some of the contract terms.  We call these express terms.  Sometimes, however, the parties express their agreement in writing and thereafter one party claims that the parties agreed, either at an earlier time or contemporaneously with execution of the writing, to other express terms that either add to or contradict the writing.  Can those other alleged terms become part of the contract?  The parol evidence responds to this question.  See Commentary.Parol evidence. 

     Often, the written or oral expression of the parties does not address questions that must be answered, even such basic questions as the price to be paid, the time of performance, or the remedy for breach.  The absence of sufficient terms may mean that no contract has been formed.  R.2d Contracts 33.  But if there are sufficient terms to form a contract, contract law supplies necessary missing terms, either by implication from the facts and circumstances attending formation of the contract or by default rules.  We first encountered implied-in-fact terms in Wood v. Lucy, Lady Duff-Gordon (where an implied-in-fact term -- to use best efforts to market products - - supplied consideration for a promise of an exclusive right to market designs) and we see another example in Pugh v. See's Candies (in which an employee claims that he was not treated sweetly by his employer).  As an initial example of default terms, we look at implied warranties under Article 2 of the Uniform Commercial Code.  See Problem.Dispute.Laptop computer, Commentary.Default terms, and Bailey v. Tucker Equipment Sales, Inc.

     The meaning of express terms may also be the subject of dispute.  Accordingly, we also must attend to tools of interpretation supplied by contract law to resolve such disputes.  See Commentary.Interpretation.   It is useful to learn about these tools from two perspectives, the perspective of the litigator or judge and the perspective of the contract drafter.  Thus, you will look at how courts ascertain meaning when the parties have not been able to resolve a disagreement about meaning, and, by practicing some contract drafting, you will experience the possibilities and difficulties of expressing meaning as clearly and concisely as possible in an effort to avoid future disagreement.  As a prelude to some contract drafting exercises, please read Commentary.Anatomy of a written agreement.