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Contracts

Date post: 23-Feb-2016
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Contracts. Chapter 5. Identifying a contract’s elements will help you manage your affairs in an intelligent and effective manner. Why you need to know. Describe any contracts you may have entered in the past month? Between you and friend Between you and your parents Between you and sibling - PowerPoint PPT Presentation
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Contracts Chapter 5
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Page 1: Contracts

ContractsChapter 5

Page 2: Contracts

Why you need to know

• Identifying a contract’s elements will help you manage your affairs in an intelligent and effective manner

Page 3: Contracts

Intro to Contracts

• Describe any contracts you may have entered in the past month?• Between you and friend• Between you and your parents• Between you and sibling• Between you and a store• Between you and a credit card company• Between you and a phone company

Page 4: Contracts

Three theories

• Equity theory

• Will theory

• Formalist theory

Page 107

Page 5: Contracts

Six Elements Figure 5.1

• Offer

• Acceptance

• Genuine Agreement

• Consideration

• Capacity

• Legality

Page 108

Page 6: Contracts

Characteristics

• Valid, void, voidable, or unenforceable• Legal, missing elements, legal but able to be voided, law

• Express or Implied• Stated in words, actions of parties

• Bilateral or Unilateral• Two sided promise, one sided promise

• Oral or Written• Word of mouth, in writing

Page 110

Page 7: Contracts

What if?

• What if all contracts had to be in writing to be enforceable?

Page 8: Contracts

POP QUIZ!!! - QUESTION

• Sarah paid Isabel $50 to hack into Mrs. Wojcik’s computer files for a copy of the upcoming final exam, but Isabel gave Sarah a copy of the pretest instead. Is this contract valid, void, voidable, or unenforceable?

Page 9: Contracts

POP QUIZ!!! - ANSWER

• Sarah paid Isabel $50 to hack into Mrs. Wojcik’s computer files for a copy of the upcoming final exam, but Isabel gave Sarah a copy of the pretest instead. Is this contract valid, void, voidable, or unenforceable?

Page 10: Contracts

Requirements of an Offer

• Serious intent• Invitations to negotiate (page 114, example 3)

• Definiteness and certainty• “fair share”, “reasonable”, “some”

• Communications to the offeree• Example 5 page 116

Page 11: Contracts

Requirements of Acceptance

• Unconditional Acceptance• The mirror image rule• Counteroffer (change in roles)• Uniform Commercial Code (UCC)• Non merchant• Merchant• No crucial difference• No objection• Limited acceptance in original

Page 12: Contracts

Requirements of Acceptance

• Methods of Acceptance• Time• Implied by past practice• Stated in offer• By action• See example 7 on page 119

Page 13: Contracts

Termination of an Offer

• Revocation• Taken back

• Rejection• Refusal

• Counteroffer• Ends first offer and puts another on the “table”

• Expiration of Time• Set in offer

• Death or Insanity• Only an offer, not an contract

Page 14: Contracts

Write an offer

• Pair up

• Write down an offer on a sheet of paper that does not meet all three requirements.


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