Ch. 10: Contracts: Nature and Terminology - No. 1 Clarkson et al.’s Business Law (12th ed.) CONTRACT VS. PROMISE Promise: A person’s declaration that he will perform or refrain from performing some present or future act. Promisor: The person making the promise. Promisee: The person to whom the promisor made the promise. Contract: An agreement between two or more competent parties, for valuable consideration, to perform or refrain from performing some present or future act. Offeror: The person proposing an agreement. Offeree: The person to whom the offeror proposes the agreement. Ch. 10: Contracts: Nature and Terminology - No. 2 Clarkson et al.’s Business Law (12th ed.)
CONTRACT REQUISITES Agreement: The offeror must offer to enter into an agreement, and the offeree must accept the terms of the offeror’s offer. Consideration: Something of value given or promised to convince a party to agree to the deal. Contractual Capacity: Both parties must be legally competent to enter into the agreement. Legality: The contract’s purpose must be to accomplish some goal that is legal and not against public policy. Genuineness of Assent: The apparent consent of both parties must be genuine. Objective Theory of Contract: The parties’ assent is judged not by the subjective intent of each party, but by the objective intent that a similarly situated reasonable person would understand the parties to have. Voluntary Consent: Each party must give its consent voluntarily. Form: The agreement must be in whatever form ( e.g. , written, under seal) the law requires. Ch. 10: Contracts: Nature and Terminology - No. 3 Clarkson et al.’s Business Law (12th ed.)
CONTRACT TYPES Bilateral Contract: A bilateral contract arises when the offeror gives her promise in exchange for the offeree’s return promise ( e.g. , X promises to deliver a car to Y, and Y promises to pay X an agreed price).
- Fall '12
- Business Law, Clarkson, Clarkson et al.