Chapter 10 Business Law study guide - Ch 10 Contracts Nature and Terminology No 1 Clarkson et al.s Business Law(12th ed CONTRACT VS PROMISE Promise A

Chapter 10 Business Law study guide - Ch 10 Contracts...

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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.)
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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.)
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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).
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