Chapter10 - The Objective Theory of Contracts What a...

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The Objective Theory of Contracts What a reasonable person would have done under the circumstances. 1. What the parties said 2. How they acted or appeared 3. Alllllllllll the surrounding circumstances Requirements of a Valid Contract The following list briefly describes the four requirements that must be met before a valid contract exists. If any of these elements is lacking, no contract will have been formed. (Each requirement will be explained more fully in subsequent chapters.) 1. Agreement. An agreement to form a contract includes an offer and an acceptance. One party must offer to enter into a legal agreement, and another party must accept the terms of the offer. 2. Consideration. Any promises made by the parties to the contract must be supported by legally sufficient and bargained-for consideration (something of value received or promised, such as money, to convince a person to make a deal).
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3. Contractual capacity. Both parties entering into the contract must have the contractual
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This note was uploaded on 03/31/2008 for the course FIN 3055 taught by Professor Cgiles during the Spring '08 term at Virginia Tech.

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Chapter10 - The Objective Theory of Contracts What a...

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