Contracts 101 Presented by Anthony T Bowser Esquire Thomas Thomas amp Hafer LLP 305 N Front Street 6FL Harrisburg PA 17101 wwwtthlawcom Great Contracts in History Contracts The Basics ID: 1028763
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1. PA Public Transportation AssociationContracts 101Presented by:Anthony T Bowser, EsquireThomas, Thomas & Hafer LLP305 N Front Street, 6FLHarrisburg, PA 17101www.tthlaw.com
2. Great Contracts in History
3. Contracts: The BasicsConsiderationOffer and acceptanceLegal purposeCapable partiesAbsence of vitiating factorsPerformance33
4. ConsiderationConsideration is the benefit that each party gets or expects to get from the contractual deal Must represent a change in positione.g. - Comcast gets my money and I get endless Dukes of Hazzard reruns44
5. Lack of ConsiderationOne of the parties was already legally obligated to performThe promise amounts to a gift, not a contractThe exchange is for "past consideration" The bargained-for promise is illusory55
6. ConsiderationUnequal considerationGenerally, courts will not consider sufficiencyException – Restrictive Covenants66
7. Consideration: PA UWOAPennsylvania’s Uniform Written Obligations Act (“UWOA”), 33 Pa. Stat. § 6Inclusion of “the signer intends to be legally bound” language in signed, written agreement is sufficient to bind parties even lacking in consideration77
8. Soooo…we’re good, right?Socko v. Mid-Atlantic Systems of CPA
9. Offer & Acceptance
10. Offer & AcceptanceMeeting of the MindsAn offer is an indication by one person to another of their willingness to contract on certain terms without further negotiationsA contract is then formed if there is express or implied agreementCritical terms1010
11. Offer & AcceptanceSeems pretty simple, right?Bilateral versus Unilateral 1111
12. Offer & AcceptanceRevocationCounter-offers1212
13. Legal PurposeDomestic or social agreementsUsury chargesIllegal purpose1313
14. Capable PartiesTo be "capable" of making a contract, the parties must understand what they're doingMinors, mentally infirmAuthority to bind1414
15. Capable PartiesActual authority to bind government U.S. Postal Serv. v. Sunshine Dev., Inc., 674 F. Supp. 2d 619, 625-26 (M.D. Pa. 2009)1515
16. Capable PartiesThe actual authority requirement is an additional prerequisite for effective formation of government contracts. The scope of an agent's authority may be explicitly defined by legislation, properly exercised through the rule-making power1616
17. Capable PartiesApparent authorityTo establish apparent authority, 3rd party must demonstrate that he reasonably relied on the agent's alleged appearance of authorityApparent authority inapplicable in government contracting absent ratification (Chainey v. St., 523 F.3d 200, 213 (3d Cir. 2008))1717
18. Absence of Vitiating FactorsDuressUndue InfluenceMistakeMisrepresentation1818
19. Performance / BreachMaterial versus ImmaterialNotice and Opportunity to CureWhen breach goes “directly to the essence of the contract” and is “exceedingly grave” the non-breaching party may terminate the contract without noticeLJL Transp., Inc. v. Pilot Air Freight Corp., 599 Pa. 546, 567, 962 A.2d 639, 652 (2009)1919
20. Remedies for BreachCompensatory DamagesExpectation DamagesConsequential Damages2020
21. Remedies for Breach, cont.Liquidated DamagesPunitive DamagesNominal DamagesSpecific PerformanceRescissionReformation2121
22. Boilerplate Provisionsaka “The Fine Print”2222
23. Common Boilerplate ClausesJurisdiction and VenueArbitration / ADRChoice of LawsSeverability Waiver2323
24. Common Boilerplate ClausesIntegrationAssignment AmendmentRecovery of Attorneys’ Fees & Costs2424
25. Common PitfallsProper PartiesPrice Terms and ModificationTiming of PerformanceAccepting Inapplicable BoilerplateAutomatic Renewal2525
26. SUCCESS!!!2626
27. Questions/Comments?2727
28. Anthony T Bowser, EsquireThomas, Thomas & Hafer LLP305 N Front StHarrisburg, PA 17101717-441-3959 Twitter: @AnthonyBowserabowser@tthlaw.com2828