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ContractsChapter 5
Why you need to know
• Identifying a contract’s elements will help you manage your affairs in an intelligent and effective manner
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
Three theories
• Equity theory
• Will theory
• Formalist theory
Page 107
Six Elements Figure 5.1
• Offer
• Acceptance
• Genuine Agreement
• Consideration
• Capacity
• Legality
Page 108
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
What if?
• What if all contracts had to be in writing to be enforceable?
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?
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?
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
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
Requirements of Acceptance
• Methods of Acceptance• Time• Implied by past practice• Stated in offer• By action• See example 7 on page 119
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
Write an offer
• Pair up
• Write down an offer on a sheet of paper that does not meet all three requirements.