Contract Law

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Contract Law. The Big Picture. The Legal System. Criminal Law. Civil Law. Employment Law. Consumer Law. Tort Law. Contract Law. Today’s Objectives. Identify the six elements of a contract. Explain the effects of a contract on a minor. Identify types of contracts. - PowerPoint PPT Presentation

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Contract Law

Contract LawThe Big PictureCriminal LawCivil LawThe Legal SystemTortLawContractLawConsumerLawEmploymentLawTodays ObjectivesIdentify the six elements of a contract.Explain the effects of a contract on a minor.Identify types of contracts.Analyze the need for contracts.THINKER QUESTIONHow many of you are currently subject to a contractual agreement? What are some examples of contracts?Potential ContractsCredit CardGrocery store club cardSelling / buying something to a friend for moneyMovie rental store agreementCollege commitment or sports agreementPart-time jobsEmail accounts, iTunes, etc.What is a Contract?The Nature of a ContractA contract is any agreement enforceable by law.Not all agreements are contracts.

What makes a contract?Six Elements of a ContractElements of a ContractOfferAcceptanceAgreementConsiderationCapacityLegalityIn order to have a legally enforceable contract, all six elements must be present.Do contracts have to be in writing to be enforceable by law?OfferProposal to make a definite and certain deal with serious intentMust be communicated to another personRemains open until it is accepted, rejected, retracted, or expiresCounter-offers can be made and close the original offer

Definite identifies the basic obligation of the contract10AcceptanceAcknowledgement by the offeree (person receiving the offer) that the offer is accepted unconditionallyMust be communicated to the offeror in a reasonable mannerMay be spoken, written, or by action

Genuine AssentReached when a valid offer is met by a valid acceptanceThe offer and acceptance together create genuine assent.Genuine agreements cannot exist if there is fraud, misrepresentation, mistake, undue influence, etc.

Is it valid?Read each example and decide.Jim negotiated a deal to re-roof his house with a carpenter. They did not sign a written agreement. The roofers showed up at the house on the agreed day, and another carpenter had already started work. Was there a contract?Cheryl was fired from her job at the newspaper, and she sued because she thought there had been gender discrimination in her firing. Cheryl and the newspaper company agreed on the basic outline for a settlement, but before it was signed, she backed out and wanted to go to court. Should the settlement be binding?

An advertisement in a magazine promises, Our product will clear up your acne or we will give you double your money back! Jenny bought the product, ProAktiv, at a drug store and did not notify the company that she planned on taking them up on their offer. Does the ProAktiv have to pay Jenny double her money back if the product does not work?The Other ElementsCapacityLegal ability to enter a contractContracts can be disaffirmed by:MinorsPeople with mental impairmentsPeople under the influence

Minors can enter into a contract provided the other party is aware of the minors age. The law usually gives minors the right to disaffirm contracts.18ConsiderationConsideration is what is exchanged as a result of the contract.May be money, property, or services

LegalityIn general, a court will not help any party to an illegal contract.Neither party can enforce the agreement.Neither party can get help from the court.

Email Account ContractsYahoo handout21Yahoo!Who is the offeror? The offeree?What is the offer?What is being offered? Key terms?How does a user accept?When does acceptance bind the user?What is the consideration for each party?Identify any other interesting parts of the contract.Types of ContractsWhat kinds of contracts are recognized by law?The Law RecognizesExpress Contracts written or spokenImplied Contracts comes from the actions of the partiesExecutory Contracts not fully performedExecuted Contracts completed by both partiesQuasi-Contracts missing an element, still enforceableSales Contracts sale of property, rent, wills, estatesEmployment Contracts business organizationsBilateral contracts contract that contains two promises.Unilateral contracts Contract that contains a promise by only one person to do something, if and when the other party performs some act. Example: RewardMirror Image rule terms stated in the acceptance must exactly mirror or match the terms of the offer.Termination of an OfferRevocation the taking back of an offer by the offeror.Rejection is a refusal of an offer by the offeree that brings the offer to an endExpiration of Time if the offeror sets a time limit of the offer, it must be honored.Counteroffer is a response to an offer in which the terms of the original offer are changed.

Termination of an OfferDeath or Insanity If the offeror dies or becomes insane before the offer is accepted, the offer comes to an end. Although death ends an offer, it does not end a contract, except for contracts related to personal services.Why do we need contracts?We need contractsBecause they are important in a free-market economyBecause verbal (handshake) agreements are in declineBecause they have protective powerBecause the court can intervene & enforceBecause of the litigious nature of societyEnforcing ContractsLast ClassIdentify the six elements of a contract.Explain the effects of a contract on a minor.Identify types of contracts.Analyze the need for contracts.Todays ObjectivesAnalyze agreements to determine if a valid contract exists.Determine when a breach of contract occurs.Identify defenses to contractual agreements.Apply contract law to negotiation deals.BreachBreaching a ContractIf one party does not follow through with consideration in a contract, the other party doesnt have to perform.Failure to perform is called a breach.Thinker Question!What happens when one party breaches a contract?EnforcementDamages the party who is harmed can request money (equal to the amount lost from the breach) from the other partySpecific Performance if it is still possible to perform the contract, the court can require the party to performSam burned his hand on the stove. The burn was so bad that it permanently scarred his hand and made it difficult to grip things. A doctor told him that he could fix his hand with a simple skin-grafting procedure for $1200.After the surgery, Sams hand worked perfectly but, he started growing hair out of the palm of his hand. He tried waxing it, but he couldnt stop the hair from growing back. He decides to sue the doctor for giving him a hairy hand.Did the doctor breach the contract? Should the court do something about it? If so, what should the court do?37Defenses to ContractsCertain things can make contracts void, even though both parties agreed on the terms and there was valid consideration.UnconscionabilityIf one party tricked another party into agreeing to an unfair contract, the court may not enforce it.Example: businesses who try to trick poor or uneducated clients

Fraud or DuressLying or misrepresenting something in negotiationsTaking advantage of someone in a bad situation

A law,the Statute of FraudsRequires that certain contracts must be in writing to be enforceable.Contracts for SaleContracts for LeaseContracts for a mortgage (real property)Contracts longer than 1 yearCollateral contractsPrenuptial agreementsContracts for sale of goods valued at $500 or moreExplain the impact ofThe Uniform Commercial Code on interstate commerceMakes it easier to do businessEliminates the need for the involvement of lawyers with regard to the various aspects of interstate business.