Popular Misconceptions About Contracts

My new book, Contracts in the Real World: Stories of Popular Contracts and Why They Matter, has three aims:

* to reveal contract law’s pragmatic, common sense beauty;

* to show the relevance of longstanding principles and famous cases to contemporary problems and disputes in the news; and

* to correct dozens of popular misconceptions about contracts.

In the latter spirit, following is a list of popular misconceptions about contracts. Most are very general while a few are quite specific.

The list is numbered 1-20 but I’ve left 18-20 blank, hoping that you will add at least that many in the responses. I’d also be happy to have any of these stricken or revised. Thanks!

1. Promises to make gifts are legally enforceable.

2. Advertisements create offers that can be accepted to make a binding contract.

3. Clicking “yes” on a terms-of-use icon does not create a binding contract.

4. An airline ticket’s confidentiality clause prevents the airline from sharing personal data.

5. Employees can only be fired for “cause.”

6. A celebrity’s payment to a gadfly to hush up about a private affair creates a valid contract.

7. Gambling contracts are invalid.

8. Promises must be kept, come hell or high water.

9. Caveat emptor (“let the buyer beware”) rules.

10. Children are responsible for their contracts just as adults are.

11. When someone breaches a contract, courts most often order them to perform it.

12. When courts award money for a breach of contract, the amount includes all losses the breached caused.

13. If the contract says what money should be paid upon breach, courts award that amount.

14. To be valid, a contract must be in writing and signed or notarized.

15. Contracts can’t be changed once they are made.

16. Promises must be performed to a T so that shortcomings forfeit all rights to any promise the other side made.

17. No one but the parties to a contract can have any rights or duties under it.




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5 Responses

  1. b says:

    you win attorney’s fees if you win an action for breach of contract.
    being highly intoxicated when you purchase something allows you to later cancel the transaction.

  2. Lawrence Cunningham says:

    Thanks for those two good examples!

  3. Practicing, Esq. says:

    This seems like it will be a fun and lively book. Can’t wait to read it. Per the recommendation of Randy Barnett or someone over at Volokh, recently read the Oxford Introduction to US Law: Contracts. While I found it a good, quick refresher on contract law, it did not have much contemporary relevance and seemed like it wouldn’t appeal to a layperson.

    Unfortunately “Contracts In The Real World” does not appear available for pre-order on Amazon. You will have to plug it again once it does, as a reminder.

  4. Miriam A. Cherry says:

    Misunderstandings I’ve heard (or seen on student exams):

    Contracts can be “cancelled” after they are made without any penalty, so long as the retraction is made quickly

    Thinking you can get punitive damages for breach of contract.

  5. Lawrence Cunningham says:

    Thanks, thanks! Looks like we’ve reached 20, but I’m delighted to have further additions. A year or two after my book comes out, of course, I’d like to see the list shrink away.