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Transcript of Contract Presentation
Nature of a Contract
Three theories of contract law
Courts asked whether the parties exchanged things of equal value
Would ask whether the parties had agreed to the terms set forth in the agreement.
Must be concrete evidence that a contract was agreed upon
The Elements of a Contract
A proposal by one party to another
intended to create a legally binding
The agreement of the offeree to be bound by the
terms of the offer.
Offer and acceptance go together to create a meeting of the minds. Agreement can be destroyed by fraud, misrepresentation, mistake, duress, or undue influence
The thing of value promised to one party in a contract in exchange for something else of value promised by the other party. The mutual exchange binds the parties together.
The law presumes that anyone entering a contract has the legal ability to do so. Minors are generally excused from contractual responsibility, as are mentally incompetent and drugged or drunk individuals
Parties are not allowed to enforce contracts that involve illegal acts. Some illegal contracts involve agreements to commit a crime or a tort. Others involve activities made illegal by statutory law.
Charcteristics of a Contract
Valid, Void, Voidable, or Unenforced
Requirements of an Offer
Legally Good, a contract that is legally binding
Definiteness and Certainty
A contract that is void has no effect.
When a party is able to void or cancel a contract for some legal reason
A contract the court will not uphold, generally because of some rule of law
Invitation to negotiate
Offer made with intent of entering into a obligation
Invitation to deal, trade, or make an offer.
An offer must be definite and certain to be enforeable
Communication to the offeree
Express or Implied
Offers may be made by any method that communicates the offer to the offeree
Stated in words
Oral or written
Definite and certain
communicated to the offeree
Comes from actions
Don't exchange a word
Bilateral or Unilateral
Contains two promises
Promise must be upheld if and when other party acts.
Created by word of mouth and comes into existanct when two or more people form a contract by speaking to each other.
Assures both parties know the exact terms
Requirments of an acceptance
Termination of an Offer
Second element to a contract.
Requirements must be met.
The taking back of an offer by the offeror
refusal of an offer by the offeree.
Must not change original offer
Change in terms means offeree has not accepted
Ends the first offer, creates a new offer the offeror must choose to accept or reject.
Change in the terms by the offeree resulting in the original offeror becoming the offeree.
Expiration of time:
If the offeror sets a time limit for the acceptance of the offer, if must be honored
Death or insanity:
if the offeror dies or becomes insane before
the offer is accepted the offer comes to an end.
Mirror image rule-
The acceptance of an offer must not change the terms of the original offer in any way.
Methods of Acceptance
False Representation of Facts
Representation Known to be False
Most important part of acceptance is the time
When parties meet face-to-face no special problem exists
However problems arise when acceptance pf cpmtracts are far distances.
False Representation Intended to be Relied Upon
False Representation Actually Relied Upon
Deliberate deception intended to secure an unfair or unlawful gain
Not revealing inportant information
The party making the false representation must be aware that the representation is false.
The person making the misrepresentation must intend that the other party rely on the information as part of contract negotiations
If the fraud is to be proven,
the false representation must be reasonably relied upon by the other party when the agreement is made
Discharge by Agreement
Discharge by Performance
Time for Performance
Accord and Satisfaction
An agreement between two parties to and an agreement
Parties fulfill terms early
All terms have been carried out properly and completely
For example, if you need to buy certain car in a week, the contract expires when the time does.
Terms of contract must be completed
Court allows a resonable time
Does offeror feel satisfied
Reasonable person test
Tender of Performance
Fulfilling contract terms
Tender is necessary
Parties fulfill the terms of the contract by doing what they promised earlier.
All terms of contract have been carried out properly and completely.
Time related to completing terms of a contact.
When someone completes the major points of the contracts though doesn't do the minor terms.
Offer to do what you have agreed to do under a contract.