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How Contracts Arise Chapter #5. When Was the last time you entered into a contract.
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Transcript of How Contracts Arise Chapter #5. When Was the last time you entered into a contract.
Contract
Is any agreement enforceable by law – Not all agreements are contracts
Theories of Contract Law Equity theory of Contract Law Will Theory of Contract Law Formalist Theory of Contact Law
Elements of a Contract
6 Elements1) Offer
2) Acceptance
3) Genuine Agreement
4) Consideration
5) Capacity
6) Legality
Acceptance
Is the second party’s unqualified willingness to go along with the first party’s proposal
Genuine Agreement
If a valid offer is met by a valid acceptance a genuine agreement exists Item like to following can destroy a genuine
agreement Fraud Duress Undue Influence Mistake
Characteristics of a Contract
Valid, Void, Voidable, or Unenforceable
Express or Implied
Bilateral or Unilateral
Oral or Written
Valid, Void, Voidable or Unenforceable
Valid – means legally good
Void – has no legal effect it is missing one of the elements of a contract.
Voidable – When a party to a contract a able of void or cancel for some legal reason
Unenforceable – is one the court will not uphold because of some rule of law.
Express Contract VS Implied Contract
Express is a contract stated in words and may be either oral or written
Implied contract comes about from the actions of the parties no words are exchanges.
Example #1
Bilateral VS Unilateral
Bilateral – means two sided Bilateral contract contains two promises – one
party promises to do something in exchange for the other’s promise to do something else.
Unilateral – Means one sided Contains a promise by only one person to do
something.
Example #2
Oral or Written
Oral – is created by word of mouth two people speak to each other.
Written – Written proof of the contract – Some types of contract must be in writing
Requirements of an offer It must have three basic requirements
Made Seriously Definite and Certain Communicated to the offeree
Serious Intent –the offer must be made with real intent to create a contract.
Invitations to Negotiate – Sales ads Example #3
Definiteness and Certainty – actual amounts
Example #4
Communication to the Offeree – Pone, Fax, Letter. E-mail
Requirements of an Acceptance
Two basic requirements1) Unconditional – The acceptance must not
change the terms of the original offer in any way.
1) Mirror Image Rule-
2) Any changes to the offer is a counteroffer1) Example #6
2) Follow rules regarding the method of acceptance –
1) Read this section aloud1) Example #7
Termination of an Offer
5 Ways to terminate Revocation – Taking back offer from offeree-
Before it is accepted Rejection- No acceptance Counteroffer- Counteroffer end the first offer
and starts another contract Expiration of Time- Time set of the deal ends Death or Insanity- It ends an offer but not a
contract.