General Intro | Contracts | Contract Definition, What is a Promise, Legal Enforceability
Summary
TLDRProfessor Tracy introduces the concept of contracts through the lens of promises. She explains that a contract is a promise or set of promises recognized by law, enforceable through legal remedies. Key elements of a promise include a clear intention to act or refrain from acting, communicated outwardly to justify a promisee's understanding of commitment. The video distinguishes between contractual promises, which are part of an exchange and thus legally enforceable, and gratuitous promises, which lack legal enforcement unless fulfilled. This foundational lesson sets the stage for deeper exploration into contract law.
Takeaways
- π A contract is legally defined as a promise or set of promises, enforceable by law when a breach occurs.
- π£οΈ The core of a contract is a 'promise', which is a commitment to perform or refrain from performing a specified action.
- π€ The person making the promise is known as the 'promisor', and the person to whom the promise is made is the 'promisee'.
- π‘ A promise in law must be a clear intention to act or refrain from acting in a specified way, communicated to the promisee.
- π£οΈ For a promise to be legally recognized, it must be outwardly expressed, not just an internal thought.
- π The legal system uses three main tools to interpret promises: ordinary meaning of words, technical meaning where applicable, and surrounding circumstances.
- π The intention to act or refrain from acting is crucial; a promise must be specific and not just a hope or general statement.
- π¬ Promises can be made verbally, in writing, or inferred from conduct, depending on the context and clarity of the commitment.
- π Not all promises are legally enforceable; only 'contractual' promises, which are part of an exchange or have consideration, are typically enforceable by law.
- π A 'gratuitous' or 'naked' promise, made without expectation of something in return, is generally not legally enforceable unless other conditions are met.
- ποΈ The script introduces an analytical framework for understanding contracts, starting with formation, moving through defenses, interpretation, breach, and remedies.
Q & A
What is the legal definition of a contract according to the script?
-A contract is defined as a promise or a set of promises for which the law recognizes either a duty or provides a legal remedy in case of a breach, which is the failure to fulfill the promise.
What are the key elements to consider when determining if a statement is a legal promise?
-The key elements include a manifestation of intention to act or refrain from acting in a specified way, made in a manner that would justify a promisee in understanding that a commitment has been made.
Who are the 'promisor' and 'promisee' in the context of a promise?
-The 'promisor' is the person making the promise, while the 'promisee' is the person to whom the promise is made.
How can a promise be manifested according to the script?
-A promise can be manifested through spoken or written words, or it can be inferred from conduct, depending on the surrounding circumstances.
What is the difference between a contractual promise and a gratuitous promise?
-A contractual promise is part of an exchange, usually involving a return promise or performance, and is legally enforceable. A gratuitous promise, on the other hand, is not part of an exchange and is generally not legally enforceable.
What is 'consideration' in the context of contract law as discussed in the script?
-Consideration is a return promise or performance given in exchange for a promise, which makes the promise contractual and legally enforceable.
How does the script explain the enforceability of a promise in a legal sense?
-The script explains that not every promise is legally enforceable. A promise is enforceable if it is part of a contract, which typically involves an exchange and provides for legal remedies in case of breach.
What are the three interpretive tools used to determine if a promise is a commitment?
-The three interpretive tools are: giving words their ordinary meaning, using technical meanings for specific terms, and considering all surrounding circumstances to understand the intention behind the promise.
What is an example of a gratuitous promise provided in the script?
-An example of a gratuitous promise is when Bob says, 'I promise to take you to Disney World over winter break,' without expecting anything in return, making it a naked promise that is not legally enforceable.
How does the script suggest determining whether a promise is part of an exchange?
-The script suggests that a promise is part of an exchange if there is a return promise or performance, which is indicative of a contractual relationship and makes the promise legally enforceable.
Outlines
π Introduction to Contracts
Professor Tracy begins an introductory lesson on contracts by defining a contract as a promise or set of promises recognized by law. The focus is on understanding what constitutes a promise, which is the foundational element of a contract. Using the example of Bob promising to take Barb to Disney World, the professor explains the roles of the promisor (the one making the promise) and the promisee (the one to whom the promise is made). The legal definition of a promise is explored as a manifestation of an intention to act or refrain from acting in a specified way, which justifies the promisee's understanding of a commitment being made. The paragraph emphasizes the importance of the promise as the building block of a contract and the need to break down the legal definition into understandable elements.
π£οΈ Manifestation of Intention
This section delves deeper into the concept of a promise as a manifestation of intention. The professor explains that a promise must be outwardly expressed, not just a thought kept in one's head. Using Bob's promise to Barb, the professor clarifies that for a statement to be a promise, it must show an intention to act or refrain from acting in a specific way. The paragraph distinguishes between a mere expression of hope, which does not constitute a promise, and a commitment, which does. The key element is whether a reasonable person in the shoes of the promisee would understand that a commitment has been made. The professor introduces three interpretive tools: ordinary meaning, technical meaning, and surrounding circumstances, which are crucial for determining the intention behind a promise.
π Interpreting Promises
The paragraph discusses the tools used to interpret whether a promisor intends to make a commitment. It emphasizes the importance of giving words their ordinary meaning, using technical meanings for industry-specific terms, and considering all surrounding circumstances. The professor provides examples to illustrate how these tools are applied. For instance, the word 'swear' in a promise implies a commitment, while 'hope' does not. The concept of 'extra magic hour' at Disney is explained as a technical term that requires understanding within the context of a Disney resort. The paragraph underscores the need to objectively interpret a promisor's intention based on how a reasonable person would perceive the promise.
π¬ Methods of Making a Promise
This section outlines the various ways a promise can be made, which include spoken words, written words, or inferred from conduct. The professor explains that a promise can be verbal or in writing, and it can also be implied through actions. Examples are given to illustrate each method, such as Bob verbally promising to take Barb to Disney World or writing her a letter making the same promise. The paragraph also touches on the more nuanced aspect of inferring a promise from conduct, suggesting that context and surrounding circumstances are essential for understanding whether an action constitutes a promise.
π Contractual vs. Gratuitous Promises
The focus of this paragraph is on distinguishing between contractual and gratuitous promises. Contractual promises are those that are legally enforceable and are part of an exchange, often involving a return promise or performance. The professor uses the example of Bob promising to take Barb to Disney World if she earns an 'A' in contracts, which constitutes a contractual promise because it is part of a reciprocal agreement. In contrast, gratuitous promises, which are made without expectation of anything in return, are generally not legally enforceable. The paragraph highlights the importance of consideration in making a promise contractual and the implications for legal enforceability.
ποΈ Contract Formation and Consideration
The final paragraph provides an overview of the contract formation process and the role of consideration. It introduces an analytic framework for understanding contracts, which includes contract formation, defenses, interpretation, breach, and remedies. The professor emphasizes that not all promises are legally enforceable, and the presence of consideration is crucial for determining if a promise is contractual. The paragraph sets the stage for further exploration of contract law by outlining the foundational concepts and the importance of exchange in creating legally binding agreements.
Mindmap
Keywords
π‘Contract
π‘Promise
π‘Promisor
π‘Promisee
π‘Manifestation
π‘Intention
π‘Consideration
π‘Contractual Promise
π‘Gratuitous Promise
π‘Legal Duty
π‘Breach
Highlights
A contract is defined as a promise or set of promises recognized by law, which can be legally enforced.
The law of contracts begins with understanding what constitutes a promise, which is a foundational element of a contract.
The person making the promise is termed the promissor, and the person to whom the promise is made is the promisee.
A legal promise is a manifestation of an intention to act or refrain from acting in a specified way, made to justify the promisee's understanding of a commitment.
A promise must be outwardly expressed, not just an internal thought, to be considered a manifestation of intention.
The intention behind a promise must be to act or refrain from acting in a specified way, which is a key element for a promise to be legally recognized.
The third element of a promise is that it must be made in a way that justifies the promisee's understanding that a commitment has been made.
The use of certain words like 'swear' or 'guarantee' can indicate a stronger commitment and thus a legally enforceable promise.
The ordinary meaning of words and the technical meaning of terms within a specific context are crucial for interpreting the intent behind a promise.
Surrounding circumstances can provide context to understand the intent of a promissor, especially when the language used is ambiguous.
A promise can be made through spoken words, written words, or inferred from conduct, each having different levels of enforceability.
Not every promise is legally enforceable; only those that are part of an exchange, known as contractual promises, typically are.
Gratuitous or naked promises, which are made without expectation of something in return, are generally not legally enforceable.
The concept of consideration is introduced as a return promise or performance that makes a promise contractual and thus legally enforceable.
An analytical framework for contract law is presented, outlining the stages from formation to breach and remedies.
The importance of distinguishing between contractual and gratuitous promises for legal enforceability is emphasized.
Transcripts
hey all this is professor tracy from law
simply explained with an introductory
lesson to
contracts
so our starting place here is to talk
about a promise and you might say well
why is that because when we look at the
legal definition of a contract we're
told that a contract is a promise or a
set of promises and we'll dive into the
latter half of the definition in just a
minute but it tells us that the it's a
promise or a set of promises for which
the law recognizes either a duty or it
recognizes that a breach meaning the
failure to fulfill that promise should
be given some sort of legal remedy and
so our starting place when we think of
contracts and the law of contracts is to
ask ourselves what is a promise because
that's the building block of a contract
and so when we think about a promise we
need to get some terminology out of the
way and to do that we're gonna have bob
and barb help us out here so if bob says
barb
i will take you to disney world over
winter break
then we know that that's a promise right
just like in everyday speech when we
tell somebody i will do x y and z that's
a promise it's a commitment to do
something in here bob is saying i will
take you barb to disney world over
winter break and so that's no different
under the law we're going to break it
down in a little more detail in a second
but it's still a promise and because
we're not very inventive in the law or
very creative we say that the person
making the promise is the promissor and
the person to whom that promise is made
is the promise c
and
we then need to say well what is the
legal definition of a promise
and we're told that a promise is a
manifestation of an intention to act or
refrain from acting in a specified way
so made as to justify a promisee and
understanding a commitment has been made
that's a lot going on there right and
unlike a class like criminal law or
torts which is kind of necessarily and
and broken down into elements we need to
break this down ourselves so we need to
chunk it and break it up into elements
and so we can say well what's the first
element the promisism has it's a
manifestation of an intention an
intention to do what to act or refrain
from acting in a specified way
and it means that it's so made as to
justify a promisee remember that's the
person to whom the promise is made in
understanding that a commitment has been
made so let's look at each of those
elements
so the first one is it's a manifestation
of an intention
so what do we mean by that well here if
bob is just thinking
i will take barb to disney world over
winter break
that's something that's just in his head
it's a thought that he's having it's not
a manifestation when we use the word
manifestation we mean something that is
outwardly expressed
not something that's just kept in my
head but something i have vocalized or
written or but somehow outwardly
expressed to someone else
and so here if bob is saying nothing but
just thinking in his head then we don't
have a manifestation and when we say an
intention we mean that the the person is
manifesting that they'll do something in
particular so if bob says barb i will
take you to disney world over winter
break he is now
speaking
outwardly expressing outwardly through
spoken word that he will do something
right he has an intention
to do a particular thing here that is
that he will take barb to disney world
over break
so that is in fact a promise because
it's a he has a manifestation of
intention and the other elements will be
met as well and we'll look at those in
just a second so it's an intention to do
what to act or refrain from acting in a
specified way
so if bob says
i promise
you that disney world won't be too
crowded
well there that is not a promise by bob
to act or refrain from acting in a
specified way right when bob says i
promise you that disney world won't be
too crowded
that is not
bob
committing to do a particular thing or
not to do a particular thing that's him
promising something over which he really
doesn't have any control at all he's
just saying i promise it won't be too
crowded but that's not an intention
to do something or not do something in
particular so
it may not even satisfy element one it's
certainly a manifestation of spoken word
but it's not really an intention to act
or refrain from acting in a specified
way but if bob says
i won't eat the chili this time
then that is bob
is speaking not only an outward
manifestation
to
but to also to act or not act in a
specified way here it's to not eat the
chili so now we have again a promise
right because we can
say that he is outwardly manifesting an
intention to act or refrain from acting
in a specified way
so
that those elements are satisfied and we
have the third element it where the
promise must be so made as to justify a
promisee remember that's the person to
whom the promise is made and
understanding that a commitment has been
made
so here one of the important things to
know about this element as we look at it
and
bob is saying
i hope we can do the haunted mansion
ride
he we can look at this and go well it is
an outward manifestation
uh but it's not of an intention
to act or not act in a perfect way in a
particular way he's not making a
commitment right he's using the word i
hope this is something we can do he's
not saying we will do this or i promise
that we will ride the haunted mansion
ride he's he's not doing that so here
that the third element wouldn't be
satisfied but the thing to understand
about this third element of so made as
to justify a promisee and understanding
that a commitment has been made is that
we're asking how would a reasonable
person in the shoes of the promise see
hear barb
would they understand this expression
from bob would they understand that a
commitment has been
made and here the answer is no because
of the word that he's using and just a
second we'll say well how exactly we do
we determine that
so the thing to know just right here is
we're not looking at what bob in his
head thinks that he's saying right that
would be subjective but we would say how
would this be received by the promised c
a reasonable person in the shoes of the
promisee
and here we can pretty it
fairly say that using the word hope
means he's not committing to do a
particular thing
so if though bob says something like
this
i swear that we will not dress up as
mickey and minnie this time
now he's using a word here that is not
just i hope right some sort of up in the
air word but the the reasonable person
in the shoes of the promisee barb would
think oh based on the word that he's
used that he's committing here to not do
something in particular which is
we will not dress up as mickey and
minnie this time so he's made a
commitment here
that this is something that they will
not do so that third element would be
satisfied but the question that we've
been touching on is well how exactly do
we know that
about what bob is intending it about
whether he's intending to make a
commitment or not and there are three
sort of basic tools that we use
when we are trying to decide whether or
not a reasonable person in the shoes of
the promisee
would interpret bob's manifestation
as a commitment
whether we can look at it and say yes he
has made a manifestation of an intent to
act or not act in a specified way
and
these are tools that we will use
interpretive tools that we'll come back
to
later as we progress through
this material regarding contracts
but here in this introductory lesson
it's important to at least lay some
general groundwork and say that when we
are trying to decide
whether somebody like bob the promisor
is intending to make a commitment and
how that should be understood then we
need to use some basic tools of an
interpretation to determine what his
intent is and so we'll start by saying
we're going to give his words their
ordinary meaning and so when we look at
him saying something like i swear that
we will not dress up as mickey and
minnie this time we would look at the
word swear and say well what's the
ordinary meaning of that is which means
to promise you will do something or
behave in a particular way
that's the ordinary meaning of i swear
that this is what we will do or won't do
and so we would say well the ordinary
meaning leads us to believe that he is
making a commitment here when he says i
swear we will not dress up as mickey and
minnie this time
and if there's a technical word that
we give it its technical meaning so for
instance
if bob says to barb i guarantee
we will have an extra magic hour each
day
then the word extra magic hour is a term
of art that it has a technical meaning
just giving those words their ordinary
meaning if we go to the dictionary it's
not going to help us
that that's not going to tell us what is
meant here by bob it's we need to look
and say well what does that mean in this
particular context of going to a disney
resort and staying there and going to a
park like the magic kingdom
what does that mean
well what it means is that if you stay
at the resort you get an hour either
before or after the close of park
to as a benefit of staying at the resort
you get this extra time where presumably
it's a little less crowded you get to
enjoy uh disney world in in a context at
least for a little while where there's a
few less people around
so if we give it its technical meaning
we can understand what he's saying there
that yes he's intending to make a
commitment that
we're going to
stay somewhere that's going to allow us
to have this extra hour each day
so again he would be making a promise we
know that because here we would give the
words their ordinary meaning but if
there's a technical term like magic hour
extra magic hour then we would use the
technical meaning for that phrase the
other thing to know is sometimes we need
to look at all the surrounding
circumstances in order to understand
what somebody intends so if we're trying
to interpret something objectively then
we need to account not only for the
ordinary meaning of words used in their
ordinary sense and the technical meaning
of words used in their technical sense
but also look at all the surrounding
circumstances
to understand what was meant here by the
promissor and so if we have a situation
where bob says oh don't you worry barb
we will put the magic and magic kingdom
if you know what i mean
well
it giving those words their ordinary
meaning doesn't really help us right and
it's not really a technical word but we
can look at this and say well if we know
all the surrounding circumstance that
they're going away on this trip that
they're a couple then we can look and go
oh what bob is promising there is a
romantic time with barb and so we can
say yes he is committing to have a
romantic time with his uh with his
partner barb so we can understand that
because we can look at all the
surrounding circumstances so
if we just to back up a second then we
can look back and say in order for us to
interpret and to understand
whether or not somebody in the shoes of
the promise see
should understand the promissor as
having made a commitment
we would need to say well what how do we
understand the ordinary meaning of the
words used in their ordinary sense the
tactical meaning of the words used in
their technical sense and all the
surrounding circumstances
and only then
can we answer that question
of
was there a commitment made is that last
element of the promise met well now
let's look at the method of making a
promise how may a promise be made and
here we have again a definition or a
rule that says a promise may be stated
in words either spoken or written or may
be inferred wholly or partly from
conduct again we want to chunk something
up into its elements when we have a
definition like that so we can say one
that a promise can be what it can be
either spoken or to written
or it may be inferred from
conduct so let's look at each of those
in turn with these three methods said
there could be spoken words there could
be written words or we can infer it can
be inferred from conduct so looking at
spoken words if bob says to barb i
promise to take you to disney world over
winter break that spoken word right
that's one method of making a promise he
is verbally or orally
making his promise so that would work
assuming all the elements of her promise
are mad that we've covered
then it could be written words bob could
say dearest barb i promise to take you
to disney world over winter break love
always bob so it's just written word
that works just as well for him to make
a promise to barb
then it could be inferred from conduct
and in this situation that's a little
tricky so if bob puts on his mouse ears
here
that could be him
in depending on the surrounding
circumstance that could be interpreted
perhaps as him making some sort of
promise but the normal kind of scenario
you would think of here would be
situations where
the conduct can clearly be understood as
making some sort of commitment so for
instance if you're at a bar a noisy bar
and having drinks with somebody and you
raise your hand to get the bartender's
attention and gesture something like two
bring me two right just sit up
stick your hand up with
two fingers that would be a way of
communicating
to the bartender that
i would like you to bring another round
of drinks for us
and
i am committing implicitly by my conduct
to pay for those drinks and so if the
bartender may just nod saying yes i see
you i'll send over the drinks and that
would be
a a set of promises implied by conduct
inferred by the conduct here putting on
the mouse ears may not be enough uh you
would need at least some other
surrounding circumstance perhaps if he
had packed the car up and pulled the car
up and ready to go and then he slapped
on his mouse ears then all of that
together might be enough to say yes he
is committing at that moment to take
barb on a romantic trip to disney world
over winter break
so how do we determine though whether a
promise is legally enforceable because
remember the first part of what we were
looking at was just what is a promise
looking at the anatomy of a promise but
we said when we looked at our definition
of a promise that not only is a contract
a promise or a set of promises but it's
a set of promises for which either the
law is going to provide a remedy
or it's recognizing some sort of legal
duty meaning that people make promises
all the time
but not every promise is legally
enforceable just because for instance
you promise you're going to take
somebody to dinner and invite them over
your house and you don't doesn't mean
that person can run into court and sue
you
to say well
tracy said he would take me
out to dinner and he didn't do it or he
would have me over his house to play
board games and he never did
that not every promise creates a legal
duty
or is something for which the law says
if tracy doesn't invite you over to for
dinner or doesn't invite you over for
board games that the law is going to
recognize some sort of remedy for that
that you're going to get money damages
or some sort of order that tracy must
have you over
those kinds of things
which would be a remedy so not every
promise is legally enforceable and that
makes good sense but certainly some
promises need to be legally enforceable
particularly for instance in a
commercial context or a business context
so how do we know whether something's
legally enforceable and the key issue
here of knowing whether the law is going
to recognize a duty
or recognize a remedy and often both
is that
we need to know is the promise
contractual or
gratuitous
contractual or gratuitous so what do we
mean by a contractual promise well
contractual promises are those that are
legally enforceable so now we're doing
that some sorting right where we're
saying
contractual promises are legally
enforceable but gratuitous are not so
just like we established that well of
course not every promise should allow
somebody to run an accord and sue to
enforce it because a otherwise the the
courts would be ridiculously overrun
with people suing and b that you know
that would create a very litigious
society that we don't want and people
make commitments all the time for which
we do not
allow them to run into court to enforce
it to get a remedy etc
but we need to know how do we decide
which ones the law should recognize a
remedy should say there is a legal duty
not just a moral duty to follow through
in what you commit but an actual legal
duty so it's legally enforceable and the
way we do that sorting is to say well
those promises that are contractual
are legally enforceable those that are
merely gratuitous as a general rule are
not legally enforceable i have an
asterisk there because there are often
other ways that a gratuitous promise
could be legally enforceable and we'll
look at those as we progress through all
the contracts material
so what do we mean by a contractual
promise and this is something for which
we are going to say a whole lot more but
just as an introductory matter it's a
situation where the promise is part of
an exchange that the promise is made in
return for something else usually a
return promise or return performance
and it's okay if that doesn't make total
sense right now it will moving forward
so let's look at a quick example here
with bob and barb if bob says to barb
if you earn an a in contracts i will
take you to disney world over winter
break he's now not only making a
commitment right i will take you to
disney world over winter break he's
actually looking for an exchange
something in return so barb says
sounds good
i will earn an a in contracts this
semester so barb is making a return
promise a return commitment
so we have a
an exchange of promise right a promises
it's a set of promises so when bob is
making his promise he's getting a
promise in return from barb and
that return promise we'll see is known
as consideration you don't again don't
need to fully understand that now
but it will make sense down the road but
the thing to know
is that a contractual promise is a
promise for which there is either a
return promise made as here from barb or
a return performance is given
and we'll explain exactly what that
means in more detail later but for now
it's enough to say it's part of an
exchange and so this promise for a
promise this return promise is known as
consideration in this context and so
it's part of a contract right because we
said that a contract is a set of
promises
and we've uh been unpacking this over
and over in this definition so it's
probably self-evident to call a promise
contractual that it's got to be part of
a contract and so it's got to fall
within these three things right that the
promise
it or set of promises is one for which
the law recognizes a duty to perform as
we've been saying and it gives a remedy
for breach and we'll say much more about
that but the key thing to recognize is
it's part of an exchange right an
agreement like we looked at with bob and
barb that bob is saying i will take you
to disney world over winter break if you
get an a and
barb is agreeing yes i promise i will
earn an a and contract this semester so
they've come to an agreement
so we would say that bob's promise is
contractual in nature but a gratuitous
promise we said is not legally
enforceable
because why it's not part of an exchange
it's what we call a naked or gratuitous
promise
and so when bob says
i promise to take you to disney world
over winter break
then he's made a promise and we've said
that sort of over and over again
but if that's
all that's going on and barb is silent
and recognize bob didn't say in this
case if you earn an a he's not looking
for anything in return
and barb is not
it isn't there is nothing coming in in
return then here we would say that is
just a gratuitous promise
it's not part of an exchange of promises
or a promise for performance so it's
merely gratuitous or a naked or a nude
promise that we would say as a general
rule is not legally enforceable
so a promise for a gift whether that's a
gift trip like this one in the example a
gift trip to disney world or anything
right i promise to give you a bicycle i
promise to give you a book whatever it
may be
that that promise is
if it's just for a gift it's made
without any expectation of receiving
anything in return and as a general rule
is not legally enforceable
so
to set the stage here at the beginning
i want to give you a quick look at an
analytic framework which will organize
all of the material
in contracts under this subject of
contracts so this contracts analytic
framework we can look at and say all the
way on the left is where we are now that
we are under this heading of formation
of so contract formation how do we form
a contract what are the rules governing
the formation of a contract and then
we'll look at defenses
to formation that
things that may come up either during
the formation of the contract or after
the right after the formation of a
contract
that would
either excuse
the uh the performance of the parties or
prevent the formation of the contract
we'll look at issues of interpretation
and implied terms we'll look at breach
of the contract and
related issues dealing with conditions
and repudiation and then remedies which
often is money but could be other things
so our focus on the first part though is
formation and in particular we've we're
touching on this idea of consideration
we've laid the building
sort of the foundation here the basic
building block of a contract looked at
what a promise is and
tried to distinguish between
promises that the law recognizes is
legally enforceable
which are promises that are contractual
in nature promises for which there is
consideration given meaning a return
promise or return performance
and those promises that are not as a
general matter legally enforceable
because they're gratuitous or
naked promises
so
i hope that's helpful to you as you're
working your way through contract law
thinking about these concepts obviously
there's a lot more to delve into
if this video was helpful to you i'd
appreciate if you would like and
subscribe
so i will check in with you soon with
another video thanks bye
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