Chapter 6.docx - Chapter 6 Formation of a Contract Offer...

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Chapter 6 – Formation of a Contract: Offer and Acceptance The Role of Contract Law Contracts are a good example of voluntary legal relationships They are not legal obligations forced upon everyone like tort or criminal liability Parties choose to make a contract and only then become legally obligated to comply with its terms The Nature of a Contract Contract : sets of rules that the law will enforce There are 4 requirements to form a legally enforceable contract: offer, acceptance, consideration, and intention The Nature of an Offer Offer: a description of a promise one party, the offeror, is willing to make, subject to the agreement of the other party, the offeree Advertisements are mere invitations to the public to visit the business, however advertisements could also be a contract too. (Ex. Selling a fixed number of items to those who accepts first, a reward for information) The Communication of an Offer The form of an offer is not important as long as it is heard and understood Ex. A did work for B, B was unaware of A’s work and therefore does not need to pay Written Form Standard Form Contracts: Their Risks and Benefits Offers do not have to be in writing, however, terms are used (ex tickets, online purchases) An offeree cannot change any terms of the standard form contract: an offer prepared in advance by the offeror, including terms favourable to the offeror that cannot be changed by the offeree; also known as “contract of adhesion” There are three means of protection from this inequality in bargaining 1) When a business is regulated by a government board, the terms of its contracts are subject to board approval. When boards operate effectively, the public is usually well protected and unreasonable terms are excluded
2) Some segments of the public, such as consumers are offered special protection. Consumer protection legislation provides disclosure requirements and post-acceptance cancellation options 3) In the vast range of unregulated activity, the public receives only as much protection as the courts can find in the general law of contract Required Notice of Terms A general rule, without legislative intervention, the courts will normally give effect to the terms

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