Chapter 8 - Agreement and Consideration in Contract...

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Agreement and Consideration in Contract Overview of Contract Law Promise – declaration that binds a person who makes it to do or not to do a certain act Promisor – a person who makes a promise Promisee – a person to whom a promise is made Contract law – designed to provide stability and predictability for both buyers and sellers in the marketplace by assuring parties to these private agreements that promises they make are enforceable. Contract – agreement that can be enforced in court. Objective Theory of Contracts – An agreement between two parties exists if a reasonable person could judge the acts and behaviors of the parties enough to objectively construe agreement o What parties said when entering into contract o How the party acted or appeared o Circumstances surrounding the transaction Requirements of Valid Contract o Agreement – agreement to form a contract includes offer and acceptance o Consideration – Promises made by parties must be supported by consideration o Contractual Capacity – both parties entering must have qualities as competent parties o Legality – contracts purpose must have a goal that is legal Defenses to Enforceability of a Contract; must meet requirements o Voluntary Consent – consent of parties must be voluntary o Form – contract must be in whatever form the law requires Types of Contracts Offeror – person who makes an offer Offeree – person to whom an offer is made Bilateral Contract – type of contract that arises when a promise is given in exchange for a return promise Unilateral Contract – type of contract that results when an offer can be accepted only by the offeree’s performance Formal Contracts – an agreement that by law requires a specific form for its validity Informal Contract – a contract that does not require a specific form or method of creation to be valid
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