Chapter 1: Introduction to Contracts Law.

Understanding the Role of Contracts in Legal Practice.

Contracts are fundamental legal instruments that play a pivotal role in various aspects of legal practice. They are agreements between two or more parties that create legally binding obligations enforceable by law. Understanding the nature and significance of contracts is crucial for law students and aspiring lawyers to navigate the complexities of contract law.

Definition and Characteristics of Contracts.

A contract can be defined as a legally enforceable agreement between two or more parties, where each party agrees to undertake certain rights and responsibilities. For a contract to be valid, it must satisfy essential elements, including:

a) Offer and Acceptance: The formation of a contract begins with an offer by one party and its acceptance by the other, resulting in mutual assent to the contract's terms.

b) Consideration: Contracts must involve some form of consideration, which is a bargained-for exchange of value between the parties. Consideration can be money, goods, services, or a promise to do or refrain from doing something.

c) Legal Purpose: Contracts must have a lawful purpose and cannot be created for illegal activities or against public policy.

d) Capacity: Each party must have the legal capacity to enter into the contract. This means they must be of sound mind, of legal age, and not under undue influence or duress.

Importance of Contracts in Legal Transactions.

Contracts serve as the foundation of business and personal transactions. They provide a framework for individuals and entities to define their rights and obligations, allocate risks, and ensure enforceability in case of disputes. The significance of contracts in various legal scenarios includes:

a) Business Agreements: Contracts are vital for businesses to engage in transactions with suppliers, customers, employees, and other stakeholders. They govern sales, leases, employment agreements, and partnerships, among others.

b) Real Estate Transactions: Contracts are used in buying, selling, leasing, and financing real estate properties, ensuring clear terms for both buyers and sellers.

c) Construction Contracts: In construction projects, contracts establish the scope of work, timelines, payment terms, and quality standards.

d) Intellectual Property Licensing: Contracts play a crucial role in licensing intellectual property rights, such as patents, trademarks, and copyrights.

e) Commercial Contracts: These encompass various agreements, including service contracts, distribution agreements, franchise contracts, and more.

Historical Development of Contract Law.

The principles of modern contract law have evolved over centuries of legal history. Early legal systems, such as Roman law and English common law, laid the groundwork for modern contract law. Notable cases and legal developments that have shaped contract law include:

a) Case of Hadley v. Baxendale (1854): This landmark English case established the principle of foreseeability in contract damages, stating that damages should be limited to what was reasonably foreseeable at the time of contract formation.

b) Restatement (Second) of Contracts: The Restatement, published by the American Law Institute (ALI), provides authoritative guidance on contract law and has influenced courts in various jurisdictions.

c) Uniform Commercial Code (UCC): The UCC, adopted by most U.S. states, governs commercial transactions, including the sale of goods, simplifying and unifying contract law across states.

d) Modern Contract Interpretation: Courts have shifted towards an objective approach to contract interpretation, focusing on the parties' intent as expressed in the contract's language.

Alimony, also called aliment (Scotland), maintenance (England, Ireland, Northern Ireland, Wales, Canada, New Zealand), spousal support (U.S., Canada) and spouse maintenance (Australia), is a legal obligation on a person to provide financial support to their spouse before or after marital separation or divorce. The obligation arises from the divorce law or family law of each country. In most jurisdictions, it is distinct from child support, where, after divorce, one parent is required to contribute to the support of their children by paying money to the child's other parent or guardian.

Etymology.

The term alimony comes from the Latin word alimonia ("nourishment, sustenance", from alere, "to nourish"), from which the terms alimentary (of, or relating to food, nutrition, or digestion), and aliment (a Scots Law rule regarding sustenance to assure the wife's lodging, food, clothing, and other necessities after divorce) are also derived.

History.

The Code of Hammurabi (1754 BC) declares that a man must provide sustenance to a woman who has borne him children so that she can raise them:

137. If a man wish to separate from a woman who has borne him children, or from his wife who has borne him children: then he shall give that wife her dowry, and a part of the usufruct of field, garden, and property, so that she can rear her children. When she has brought up her children, a portion of all that is given to the children, equal as that of one son, shall be given to her. She may then marry the man of her heart.

The above law only applies to women who had children with her husband. This fits more closely with the definition of child support in some jurisdictions.

Alimony is also discussed in the Code of Justinian.

The modern concept of alimony is derived from English ecclesiastical courts that awarded alimony in cases of separation and divorce. Alimony pendente lite was given until the divorce decree, based on the husband's duty to support the wife during a marriage that still continued. Post-divorce or permanent alimony was also based on the notion that the marriage continued, as ecclesiastical courts could only award a divorce a mensa et thoro, similar to a legal separation today. As divorce did not end the marriage, the husband's duty to support his wife remained intact.

Liberalization of divorce laws occurred in the 19th century, but divorce was only possible in cases of marital misconduct. As a result, the requirement to pay alimony became linked to the concept of fault in the divorce. Alimony to wives was paid because it was assumed that the marriage, and the wife's right to support, would have continued but for the misbehavior of the husband. Ending alimony on divorce would have permitted a guilty husband to profit from his own misconduct. In contrast, if the wife committed the misconduct, she was considered to have forfeited any claim to ongoing support. However, during the period, parties could rarely afford alimony, and so it was rarely awarded by courts. As husbands' incomes increased, and with it the possibility of paying alimony, the awarding of alimony increased, generally because a wife could show a need for ongoing financial support, and the husband had the ability to pay. No-fault divorce led to changes in alimony. Whereas spousal support was considered a right under the fault-based system, it became conditional under the no-fault approach. According to the American Bar Association, marital fault is a "factor" in awarding alimony in 25 states and the District of Columbia. Permanent alimony began to fall out of favor, as it prevented former spouses from beginning new lives, though in some states (for example, Massachusetts, Mississippi, and Tennessee), permanent alimony awards continued, but with some limitations.

Clause 7: Judgment in cases of impeachment; Punishment on conviction.

Judgment in Cases of Impeachment shall not extend further than to removal from Office, and disqualification to hold and enjoy any Office of honor, Trust or Profit under the United States: but the Party convicted shall nevertheless be liable and subject to Indictment, Trial, Judgment and Punishment, according to Law.

If any officer or the President or the Vice President is convicted of impeachment, that person is immediately removed from office and may be barred from holding any federal office in the future. This is purely a political remedy which "touches neither his person, nor his property; but simply divests him of his political capacity," however the convicted person remains liable to trial and punishment in the courts for civil and criminal charges. The President cannot reinstate an impeached officer with his Article 2 appointment power if such officers have been disqualified to hold any future federal office as part of their conviction.

Section 4: Congressional elections and sessions.

Clause 1: Time, place, and manner of holding elections.

The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations, except as to the Places of choosing Senators.

The purpose of this clause is twofold. First, it makes clear the division of responsibility with respect to the conduct of the election of federal senators and representatives. That responsibility lies primarily with the states and secondarily with Congress. Second, the clause lodges the power to regulate elections in the respective legislative branches of the states and the federal government. As authorized by this clause, Congress has set a uniform date for federal elections: the Tuesday following the first Monday in November.

Presently, as there are no on-point federal regulations, the states retain the authority to regulate the dates on which other aspects of the election process are held (registration, primary elections, for example) and where elections will be held. As for regulating the "manner" of elections, the Supreme Court has interpreted this to mean "matters like notices, registration, supervision of voting, protection of voters, prevention of fraud and corrupt practices, counting of votes, duties of inspectors and canvassers, and making and publication of election returns." The Supreme Court has held that States may not exercise their power to determine the "manner" of holding elections to impose term limits on their congressional delegation.

One of the most significant ways that each state regulates the "manner" of elections is through their power to draw electoral districts. Although in theory Congress could draw the district map for each State, it has not exercised this level of oversight. Congress has, however, required the States to conform to certain practices when drawing districts. States are currently required to use a single-member district scheme, whereby the State is divided into as many election districts for Representatives in the House of Representatives as the size of its representation in that body (that is to say, Representatives cannot be elected at-large from the whole State unless the State has only one Representative in the House, nor can districts elect more than 1 Representative). The Supreme Court has interpreted "by the Legislature thereof" to include the state governor's veto, and the initiative process, in those states whose constitutions provide it. This conclusion has been challenged, however, by the independent state legislature theory, which may have growing support on the Supreme Court.

Employee rights.

Derivative suits.

Because directors owe their duties to the corporation and not, as a general rule, to specific shareholders or stakeholders, the right to sue for breaches of directors duty rests by default with the corporation itself. The corporation is necessarily a party to the suit. This creates a difficulty because almost always, the right to litigate falls under the general powers of directors to manage the corporation day to day (for example Delaware General Corporation Law §141(a)). Often, cases arise (such as in Broz v Cellular Information Systems Incorporated) where an action is brought against a director because the corporation has been taken over and a new, non-friendly board is in place, or because the board has been replaced after bankruptcy. Otherwise, there is a possibility of a conflict of interest because directors will be reluctant to sue their colleagues, particularly when they develop personal ties. The law has sought to define further cases where groups other than directors can sue for breaches of duty. First, many jurisdictions outside the US allow a specific percentage of shareholders to bring a claim as of right (for example 1 per cent). This solution may still entail significant collective action problems where shareholders are dispersed, like the US. Second, some jurisdictions give standing to sue to non-shareholder groups, particularly creditors, whose collective action problems are less. Otherwise, third, the main alternative is that any individual shareholder may "derive" a claim on the corporation's behalf to sue for breach of duty, but such a derivative suit will be subject to permission from the court.

The risk of allowing individual shareholders to bring derivative suits is usually thought to be that it could encourage costly, distracting litigation, or "strike suits" – or simply that litigation (even if the director is guilty of a breach of duty) could be seen as counterproductive by a majority of shareholders or stakeholders who have no conflicts of interest. Accordingly, it is generally thought that oversight by the court is justified to ensure derivative suits match the corporation's interests as a whole because courts may be more independent. However, especially from the 1970s some states, and especially Delaware, began also to require that the board have a role. Most common law jurisdictions have abandoned the role for the board in derivative claims, and in most US states before the 1980s, the board's role was no more than a formality. But then, a formal role for the board was reintroduced. In the procedure to bring a derivative suit, the first step is often that the shareholder had to make a "demand" on the board to bring a claim. Although it might appear strange to ask a group of directors who will be sued, or whose colleagues are being sued, for permission, Delaware courts took the view that the decision to litigate ought by default to lie within the legitimate scope of directors' business judgment. For example, in Aronson v Lewis a shareholder of the Meyers Parking System Inc claimed that the board had improperly wasted corporate assets by giving its 75-year-old director, Mr Fink, a large salary and bonus for consultancy work even though the contract did not require performance of any work. Mr Fink had also personally selected all of the directors.

Introduction to the Preamble.

The Preamble of the U.S. Constitution serves as an eloquent and powerful introduction to the document. It begins with the iconic words, "We the People of the United States," emphasizing that the authority and power of the government originate from the citizens it serves. The Preamble sets the tone for the Constitution, expressing the collective vision and aspirations of the Founding Fathers.

Setting the Goals of the Constitution.

Let's now explore the Preamble's text to understand the goals it establishes for our government. It reads as follows:

"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."

Forming a More Perfect Union.

The Preamble's first goal is to "form a more perfect Union." This phrase addresses the imperfections of the previous system under the Articles of Confederation and highlights the Founding Fathers' desire to create a stronger and more unified nation. They recognized that a cohesive union was essential for the country's stability and prosperity.

A special needs trust, also known in some jurisdictions as a supplemental needs trust, is a specialized trust that allows the disabled beneficiary to enjoy the use of property that is held in the trust for his or her benefit, while at the same time allowing the beneficiary to receive essential needs-based government benefits. A Special Needs Trust is a specific type of irrevocable trust that exists under Common Law. Several Common Law nations have established specific statutes relative to the creation and use of Special Needs Trusts, and where they exist a Special Needs Trust will not be valid unless it comports with the requirements listed in the statute. The applicable Federal statute in the United States is found at Title 42 United States Code. Several States have established their own statutes.

Generally, irrevocable trusts can be used for minors, beneficiaries with physical or mental challenges, and as a method of asset protection. In addition to the public benefits preservation reasons for such a trust, there are administrative advantages of using a trust to hold and manage property intended for the benefit of the beneficiary, especially if the beneficiary lacks the legal capacity to handle his or her own financial affairs. Special needs trusts may also be useful for people who are planning for possible future disability.

Throughout the world.

A trust for a beneficiary with disability may be set up in any of the common law countries, including the United States, and also in other countries that recognize the concept of a "trust." In such jurisdictions, there is often legislation that provides advantages to such trusts in the areas of taxation and state benefits, for example, in Ireland and the United Kingdom. In the United States of America, such trusts provide advantages in helping beneficiaries qualify for health care coverage under state Medicaid programs, and also for monthly cash payments under the Supplemental Security Income (SSI) program operated by the Social Security Administration.

Overview.

Special needs trusts can provide benefits to, and protect the assets of, minors and the physically challenged or the mentally challenged. Special needs trusts are frequently used to receive an inheritance or personal injury settlement proceeds on behalf of a minor or a person with disability, or are founded from the proceeds of compensation for criminal injuries, litigation or insurance settlements.

A common feature of trusts in all common law jurisdictions is that they may be run either by family members (a private trust) or by trustees appointed by the court. Especially where a trust is to be established for a child or young person with disability, great care is generally taken in the choice of appropriate trustees to manage the trust assets and to deal with future replacement appointments. The use of a private discretionary trust can not only be more efficient in terms of taxation and access to government benefits but can also allow for more efficient investment of funds held than where funds are held by a court official (such as the Official Receiver in England and Wales). However where no appropriate trustees can be found, for example on the death of existing trustees, the court will intervene.

Special needs trusts are often set up under the guidance of a structured settlement planner in cooperation with a qualified legal and financial team to ensure the trust is set up correctly. Only authorized non-profit organizations are approved to manage a special needs trust program. Such pooled trusts are available throughout the United States and are often centered on certain purposes (often disabilities).

Today, every state plus the District of Columbia permits no-fault divorce, though requirements for obtaining a no-fault divorce vary. California was the first U.S. state to enact a no-fault divorce law. Its law was signed by Governor Ronald Reagan, a divorced and remarried former movie actor, and came into effect in 1970. New York was the last state to enact a no-fault divorce law; that law was passed in 2010.

Before no-fault divorce was available, spouses seeking divorce would often allege false grounds for divorce. Removing the incentive to perjure was one motivation for the no-fault movement.

In the States of Wisconsin, Oregon, Washington, Nevada, Nebraska, Montana, Missouri, Minnesota, Michigan, Kentucky, Kansas, Illinois, Iowa, Indiana, Hawaii, Florida, Colorado and California, a person seeking a divorce is not permitted to allege a fault-based ground (for example adultery, abandonment or cruelty).

Requirements before the enactment of no-fault divorce.

Prior to the advent of no-fault divorce, a divorce was processed through the adversarial system as a civil action, meaning that a divorce could be obtained only through a showing of fault of one (and only one) of the parties in a marriage. This required that one spouse plead that the other had committed adultery, abandonment, felony, or other similarly culpable acts. However, the other spouse could plead a variety of defenses, like recrimination (essentially an accusation of "so did you"). A judge could find that the respondent had not committed the alleged act or the judge could accept the defense of recrimination and find both spouses at fault for the dysfunctional nature of their marriage. Either of these two findings was sufficient to defeat an action for divorce, which meant that the parties remained married.

In some states, requirements were even more stringent. For instance, under its original (1819) constitution, Alabama required not only the consent of a court of chancery for a divorce (and only "in cases provided for by law"), but equally that of two-thirds of both houses of the state legislature. The required vote in this case was even stricter than that required to overturn the governor's veto in Alabama, which required only a simple majority of both houses of the General Assembly. This requirement was dropped in 1861, when the state adopted a new constitution at the outset of the American Civil War.

Bypassing the showing-of-fault requirements for divorce.

These requirements could be problematic if both spouses were at fault or if neither spouse had committed a legally culpable act but both spouses desired a divorce by mutual consent. Lawyers began to advise their clients on how to manufacture "legal fictions" to bypass the statutory requirements, with the result that by the 1920s, the actual operation of the legal system was "completely at odds with statute and case law". One method popular in New York was referred to as "collusive adultery", in which the husband would check into a hotel with a "mistress" obtained for the occasion. A photographer, also obtained for the occasion, would suddenly appear out of nowhere to take snapshots of the husband and his "mistress" in flagrante delicto. Upon presentation of the photos in court, the judge would convict the husband of adultery, and the couple could be divorced.

Employee rights.

While investment managers tend to exercise most voting rights in corporations, bought with pension, life insurance and mutual fund money, employees also exercise voice through collective bargaining rules in labor law. Increasingly, corporate law has converged with labor law. The United States is in a minority of Organisation for Economic Co-operation and Development countries that, as yet, has no law requiring employee voting rights in corporations, either in the general meeting or for representatives on the board of directors. On the other hand, the United States has the oldest voluntary codetermination statute for private corporations, in Massachusetts since 1919 passed under the Republican governor Calvin Coolidge, enabling manufacturing companies to have employee representatives on the board of directors, if corporate stockholders agreed. Also in 1919 both Procter & Gamble and the General Ice Delivery Company of Detroit had employee representation on boards. In the early 20th century, labor law theory split between those who advocated collective bargaining backed by strike action, those who advocated a greater role for binding arbitration, and proponents of codetermination as "industrial democracy". Today, these methods are seen as complements, not alternatives. A majority of countries in the Organisation for Economic Co-operation and Development have laws requiring direct participation rights. In 1994, the Dunlop Commission on the Future of Worker-Management Relations: Final Report examined law reform to improve collective labor relations, and suggested minor amendments to encourage worker involvement. Congressional division prevented federal reform, but labor unions and state legislatures have experimented.

Corporations are chartered under state law, the larger mostly in Delaware, but leave investors free to organize voting rights and board representation as they choose. Because of unequal bargaining power, but also historic caution of labor unions, shareholders monopolize voting rights in American corporations. From the 1970s employees and unions sought representation on company boards. This could happen through collective agreements, as it historically occurred in Germany or other countries, or through employees demanding further representation through employee stock ownership plans, but they aimed for a voice independent from capital risks that could not be diversified. Corporations where workers attempted to secure board representation included United Airlines, the General Tire and Rubber Company, and the Providence and Worcester Railroad. However, in 1974 the Securities and Exchange Commission, run by appointees of Richard Nixon, rejected that employees who held shares in AT&T were entitled to make proposals to include employee representatives on the board of directors. This position was eventually reversed expressly by the Dodd-Frank Act of 2010 §971, which subject to rules by the Securities and Exchange Commission entitles shareholders to put forward nominations for the board. Instead of pursuing board seats through shareholder resolutions, for example, the United Auto Workers successfully sought board representation by collective agreement at Chrysler in 1980, and the United SteelWorkers secured board representation in five corporations in 1993. However, it was clear that employee stock ownership plans were open to abuse, particularly after Enron collapsed in 2003. Workers had been enticed to invest an average of 62.5 percent of their retirement savings from 401(k) plans in Enron stock, against basic principles of prudent, diversified investment, and had no board representation. This meant, employees lost a majority of pension savings. For this reason, employees and unions have sought representation simply for investment of labor, without taking on undiversifiable capital risk.

Clause 2: Classification of senators; Vacancies.

Immediately after they shall be assembled in Consequence of the first Election, they shall be divided as equally as may be into three Classes. The Seats of the Senators of the first Class shall be vacated at the Expiration of the second Year, of the second Class at the Expiration of the fourth Year, and of the third Class at the Expiration of the sixth Year, so that one third may be chosen every second Year; and if Vacancies happen by Resignation, or otherwise, during the Recess of the Legislature of any State, the Executive thereof may make temporary Appointments until the next Meeting of the Legislature, which shall then fill such Vacancies.

After the first group of senators was elected to the First Congress (1789–1791), the senators were divided into three "classes" as nearly equal in size as possible, as required by this section. This was done in May 1789 by lot. It was also decided that each state's senators would be assigned to two different classes. Those senators grouped in the first class had their term expire after only two years; those senators in the second class had their term expire after only four years, instead of six. After this, all senators from those states have been elected to six-year terms, and as new states have joined the Union, their Senate seats have been assigned to two of the three classes, maintaining each grouping as nearly equal in size as possible. In this way, election is staggered; approximately one-third of the Senate is up for reelection every two years, but the entire body is never up for re-election in the same year (as contrasted with the House, where its entire membership is up for reelection every 2 years).

As originally established, senators were elected by the Legislature of the State they represented in the Senate. If a senator died, resigned, or was expelled, the legislature of the state would appoint a replacement to serve out the remainder of the senator's term. If the state legislature was not in session, its governor could appoint a temporary replacement to serve until the legislature could elect a permanent replacement. This was superseded by the Seventeenth Amendment, which provided for the popular election of senators, instead of their appointment by the state legislature. In a nod to the less populist nature of the Senate, the amendment tracks the vacancy procedures for the House of Representatives in requiring that the governor call a special election to fill the vacancy, but (unlike in the House) it vests in the state legislature the authority to allow the governor to appoint a temporary replacement until the special election is held. Note, however, that under the original Constitution, the governors of the states were expressly allowed by the Constitution to make temporary appointments. The current system, under the Seventeenth Amendment, allows governors to appoint a replacement only if their state legislature has previously decided to allow the governor to do so; otherwise, the seat must remain vacant until the special election is held to fill the seat, as in the case of a vacancy in the House.

Clause 3: Qualifications of senators.

No Person shall be a Senator who shall not have attained to the Age of thirty Years, and been nine Years a Citizen of the United States, and who shall not, when elected, be an Inhabitant of that State for which he shall be chosen.

A senator must be at least 30 years of age, must have been a citizen of the United States for at least nine years before being elected, and must reside in the State they will represent at the time of the election.

Course Title and Objectives.

Let's start by looking at the title of our course: "Constitutional Law: Sources and Principles." As the title suggests, we will delve into the various sources of constitutional law and examine the fundamental principles that underpin it.

Importance of the U.S. Constitution.

Now, why is it essential to study the U.S. Constitution? The U.S. Constitution is the supreme law of the land, serving as the foundation for our legal system and the framework upon which our government operates. It establishes the structure of our government, outlines the powers and limitations of each branch, and safeguards individual rights. Understanding the Constitution is crucial for any lawyer, as it forms the basis of our legal framework.

Historical Context and Drafting of the Constitution.

Before we delve into the Constitution's content, let's take a step back and examine its historical context. The Constitution was drafted in the late 18th century, following the American Revolutionary War and the failure of the Articles of Confederation. It was a result of the collective efforts and compromises of the Founding Fathers, who sought to create a more effective and unified system of government.

Basic Structure of the Constitution.

Now, let's explore the basic structure of the Constitution. It is divided into three main parts: the Preamble, the Articles, and the Amendments. The Preamble sets out the broad goals and purposes of the Constitution, while the Articles outline the powers, functions, and limitations of the three branches of government: the Legislative Branch (Article 1), the Executive Branch (Article2), and the Judicial Branch (Article 3). The Amendments, on the other hand, add to and modify the original provisions of the Constitution.

Preamble and its Significance.

Let's focus on the Preamble for a moment. The Preamble serves as an introductory statement that outlines the goals and objectives of the Constitution. It begins with the famous words, "We the People," which reflect the idea that the power of the government emanates from the citizens. The Preamble sets the stage for the subsequent Articles and Amendments, guiding the interpretation and application of the Constitution