LEB Exam 3 Study GuideChapters 11-12: Contracts & Consideration•Element #1: Agreement•What constitutes a legal “agreement”?Reasonableness: both parties have read all the concepts, must make sense to a reasonable personIntent: intent to follow through with the contract •2 Parts of the Agreement:OfferAcceptance•3 Requirements of the offer:•Intent to enter into a contract•Reasonably definite•Must be communicated – fulfilled when someone reads or hears it •Are rewards offers? These are valid offers (legally valid)•Are advertisements offers? These are not legal offers 4 ways to terminate the offer:1.Revocation: can only be revoked by person who made the offer – must be done before other party accepts it2.Rejection: other person rejects the offer3.Termination by law: party making the offer dies or goes insane 4.Lapse of time: reasonable time period considering appreciation/depreciation – very situation dependent •3 Requirements of the Acceptance:1.Intent to enter into a contract2.“Mirror Image” – we must mirror the offer3.Must be communicated: different from the offer in that this must be “sent out”•When does the acceptance take effect? When they effectively communicate it to the offeror•Can the offeror apply conditions to the acceptance? NO!Element #2: ConsiderationConsideration:•Who must give consideration?•Both of the parties•How is the value defined? •Both parties must agree on the value•Why must it be “bargained for”? •negotiation must be equal on both sides •What is a “detriment”? •something negative happened to us, one party walks away, the other party suffers a detriment•What happens if someone doesn’t give consideration?•Then it is not a valid contract •What can’tbe consideration?•Something that is per-existing •Will courts ever enforce a contract that doesn’t have consideration? Yes for example:•Promises to Charities: can be enforced
Chapters 13-14Element #3: CapacityCapacityWhat makes a contract “voidable”?MinorsGeneral Rule: minors can walk away from contractRatification: minors can also ratify contracts (turn 18 and continue in it)Exception to General Rule: if minor has contracted for necessity Ex. Minor signs lease contract to live somewhereMentally ImpairedInsanity (2 types)Legal insanity: contract voidInsanity in fact: have partial legal capacity, contract is voidable IntoxicationDoesn’t matter if its voluntary, contract will be voidableLack of ConsentFraud: deception into entering a contract, must be material (like miles on a car)Mistake of Fact: misunderstandingsMutual: both parties can walk awayUnilateral: stuck into a contract Duress: under threat or scared to sign a contractUndue Influence: peer pressure Legal PurposeWhat can make a contract illegal?