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| What sentence sums up the importance of contracts? |
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| "Almost every business transction involving people also imvolves a contract." |
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| A legally enforcable agreement; creates duties and obligations that can and will be enforced by law |
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| What is a binding agreement |
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| Enforcable duties & obligations |
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| Six elements of valid contract |
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Definition
- must have an agreement
- must be between competent parties
- must be based on genuine or mututal assent
- must be supported by consideration
- must be for a legal purpose
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| The price bargained for; are you getting what you expect from the contract |
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| The direct contracting relationship; the parties that are involved in the contract! ONLY the parties in privity can enforce their rights under the contract |
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| Contracts must reflect the voluntary present day intent to be bound by the terms of the agreements |
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Definition
TRUE
When entering into a contract, the parties must want to enter into it the day they sign |
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Classify contracts according to their information
Oral or a written agreement
Ex: an agreement written on a napkin |
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| Classify contracts by their information; must be written and have some type of formality |
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| Classifies a contract according to its creation; all terms are formally stated |
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| Classify contracts according to their creation; an implied fact & has two requirements |
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| Two requirements for implied contracts |
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- when one party renders services indicates that payment is expected
- the other party accepts those service, knowing that payment is expected
NOTHING IS FREE |
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| Classify contracts based on performance; they are fully performed |
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| Classify contracts based on the performance; not yet completed |
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| What type of law are the subject matter of contracts created in |
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| An offer by the promisor requesting performance from the promisee |
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| An offer made from the promisor requesting a returned promise from the promisee; an exchange of promises |
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| No intent or agreement,but because an event has happened.. someone should be conpensated |
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| What is required of a quasi contract |
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Definition
- a benefit is given to oneof the parties
- that party has a knowlege of the benefit
- it would be unjust not to compensate for the benefit that has been given
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Term
| What example was given in the book concerning quasi contracts |
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Definition
| Painters painting the wrong house!! The wrong house: the wife was there & she saw what was going on. She called the husband to let him know and he told her to leave the house with the children and not say anything to the painters. He didnt pay the painters so they went to court. He had to compensate because he knew that the painters were there painting his house. If he had been out of town and just came home to a newly painted house, he would not have to compensate. |
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| An expression by the offeror showing the willingness to enter into an agreement and be bound by the terms of that offer (intent) |
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| What are the requirements for a contract |
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Definition
| Must be definite and certain clearly stating all the terms of the offer |
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| Two types of contracts that are acceptions to the Definite & Certain rule |
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- Requirements Contract
- Output Contract
- Vague (or uncertain) term is QUANTITY
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| An offer to purchase all that is required |
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| Offer to purchase all that is made |
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| To be effective an offer must be communicated to the offeree. |
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| Six ways an offer can be terminated: |
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Definition
- a rejection
- offer can revoke his offer anything before it has been validly accepted
- counteroffer which extinguishes the original offer (mirror image rule)
- lapse of time
- death or disability of either party because of the concept of privity
- subsequent illegality
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| the acceptance must mirror the terms of the offer during a counteroffer |
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| When can an offer be revoked? |
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Definition
| Ordinarily, an offer can be revoked before it is accepted. If so, the offerre cannot create a contract by accepting a revoked offer |
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Term
| When is a revocation effective |
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Definition
| When the revocation is made known to the offeree |
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Term
| What constitutes a valid acceptance |
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Definition
| An acceptance is the assent of the offeree to the terms of the offer. There must be a clear expression that the offeree agrees to be bound by the terms of the offer. |
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| Only the person to whom an offer is directed |
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| How must an offer be accepted |
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- The offeree manifesting his intent to enter into a binding agreement on the terms stated within the agreement.
- An informal okay
- Performance of the act called for in a unilateral contract
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| Is silence ever an acceptance of an offer |
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Definition
| NO! Silence is never considered a valid acceptance. |
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| A properly addressed, postage-paid mailed acceptance takes effect when the acceptance is placed into the control of the US Postal Service or placed in the control of a private third party such as Fed Ex or UPS |
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| What right does someone or a business take if they recieve unordered merchandise from a commercial sender has under the Postal Reorganization Act |
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Definition
| To retain, use, discard, or dispose of it in any manner the recipient sees fit without any obligation whatsoever to the sender |
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| What is the last step in the formation of a bilateral contract |
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| An acceptance by the offeree |
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| The person who makes a promise |
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| The person to whom the promise is being made |
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| If the promise is binding, it imposes on the promisor a duty and he is now called the ____ |
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| The promisee who can claim the benefit of the oblifation is called the _____ |
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| an agreement that otherwise binding and enforcable, but because of the circumstances surrounding its execution or the lack of capacity of one of the parties, it may be rejected at the option of one of the parties |
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| Example of a voidable contract |
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Definition
| a person who has been forced to sign an agreement that that person would not have voluntarily signed |
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| What are the effects of a voidable contract |
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Definition
| it is not legally binding (enforcable) |
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| The ability to understand that a contract is being made and to understandits general meaning. Everyone is presumed to have capacity unless it is proven that capacity is lacking or there is status incapacity. |
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| because of the class you are in |
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| looks at the factors in the circumstance; may exist because of a mental condition caused by medication, drugs, alcohol, illness, or age. a person does not understand that a contract is being made or understand its general nature |
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Common law: any person, male or female, under 21 years of age; has been reduced to 18 "day before the birthday rule" |
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| What is the effect of a contract with a minor |
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Definition
| voidable at the election of the minor; the minor may affirm or ratify the contract on attaining majority by performing the contract, by expressly approving the contract, or by allowing a reasonale time lapse without avoiding the contract |
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| When can a minor disaffirm a contract |
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| anyti,me during minority or for a reasonable period of time before reaching minority |
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- if a minor misrepresents his age, it bars his ability to disaffirm or avoid a contract
- if a minor misrepresents his age, it does ot affect ability to avoid contract, but must pay for any benefits recieved or services has to make restitutions on damages
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