Contracts

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.