Exam_2_-_Study_Guide[1] - Chapter 10 Elements of a...

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Chapter 10 Elements of a Contract (p 217) 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) 3. Contractual Capacity – both parties entering into the contract must have the contractual capacity to do so; the law must recognize them as possessing characteristics that qualify them as competent parties. 4. Legality – the contract’s purpose must be to accomplish some goal that is legal nad not against public policy. P romise (p. 216) A promise is a person’s assurance that the person will or will not do something. The Objective Theory of Contracts (p 217) Intent is determined by what is called the objective theory of contracts , not by the personal or subjective intent, or belief, of a party. The theory is that a party’s intention to enter into a legally binding agreement, or contract, is judged by outward, objective facts as interpreted by a reasonable person. Objective facts include: 1. What the party said when entering into the contract 2. How the party acted or appeared 3. The circumstances surrounding the transaction The Functions of Contract Law (p 216/217) Contract law is necessary to ensure compliance with a promise or to entitle the innocent party to some forms of relief . Defenses to the Enforcement of a Contract A contract may be unenforceable if the following requirements are not met: 1. Genuineness of assent – the apparent consent of both parties must be genuine. For example, if a contract was formed as a result of fraud, undue influence, mistake, or duress, the contract may not be enforceable. 2. Form - the contract must be in whatever form the law requires; for example, some contracts must be in writing to be enforceable. Types of Contract (p. 218) 1. Bilateral – the offeree can accept simply by simply promising to perform; “promise to a promise”; No performance need take place; the contract comes into existence at the moment the promises are exchange. 2. Unilateral – the offeree can accept the offer only by completing the contract performance; “promise for an act”; the moment when the contract is performed
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3. Quasi contract (p. 224) – implied in law, are not actual contracts; fictional contracts created by courts and imposed on parties in the interests of fairness and justice; equitable Quantum meruit – (as much as he or she deserves) extent of compensation owed under a contract implied in law Offeror – party making the offer Offeree – the party to whom the offer is made Promisor (p. 220) – the one making the promise Promisee (p. 220) – the one to whom the promise was made Formal contract (p. 220) – contracts that require a special form or method of creation to be enforceable; Contracts under seal Informal contract (p. 220)
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