Contracts Cheat Sheet - Business Law Cheat-rttttt-=9Sheet...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Business Law Cheat-rttttt-=9Sheet Spring Semester 2007 Contract A contract is a legally binding promise. Remember that not all promises are legally binding. Only agreements that are supported by consideration are legally binding. If there is no consideration, promissory estoppel may create a quasi-contract in the sense that a promise may be legally binding (see below). UNILATERAL & BILATERAL CONTRACTS A unilateral contract is one in which the person making the offer is bargaining for a completed performance. For example an offer of a reward to catch a fugitive (or a fish) is an offer that looks towards the formation of a unilateral contract. A bilateral contract is one in which the person making the offer is bargaining for a promise to perform. Courts typically will find a bilateral contract unless the contract specifically states that the promise for promise agreement is for future performance - this is a unilateral contract. UNILATERAL CONTRACT - The Brooklyn Bridge hypothetical: A promises B $100 if B will walk across the Brooklyn Bridge. Is A bargaining for B's promise to walk across the bridge or is he bargaining for actual performance, i.e., completely walking the length of the bridge? The answer is that A is bargaining for a complete performance. The offer is not accepted and a contract is not formed until B completes the requested act of walking across the bridge. What if B starts to walk across the bridge in response to A's offer but when she is halfway across the bridge, A drops down from the sky in a parachute and shouts "I revoke." Is B's power to accept the offer by completing performance terminated? Early courts argued that it was. After all, if the only way to accept an offer to enter into a unilateral contract was by completely performing, and the person making the offer retained his power to revoke or withdraw the offer any time prior to acceptance, then it follows logically that B could effectively revoke the offer because there has been no acceptance until B has walked the entire length of the bridge. However, modern law has modified the rule. Under modern law, A's offer is in effect an option contract in that once B has started to perform A is not free to withdraw the offer until B has had a reasonable time to complete performance. Offer and Acceptance A contract is an agreement to do or not to do a certain thing. An essential prerequisite to the formation of a contract is an agreement, i.e., mutual assent to the same terms. Mutual assent is ordinarily established by a process of offer and acceptance. To discover whether parties have assented to an agreement courts examine both their words and deeds. There are a great variety of ways to reach an agreement as there is no standard verbal formula or prescribed conduct which invariably signifies assent. Even in cases where the offer and - 1 -
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
acceptance cannot be identified, thinking in terms of offer and acceptance is a helpful analytical tool. Two Contrasting Theories of Contract Objective vs. Subjective.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/21/2008 for the course B LAW 210 taught by Professor Mumford during the Spring '07 term at Washington State University .

Page1 / 10

Contracts Cheat Sheet - Business Law Cheat-rttttt-=9Sheet...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online