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test 2 study guide - Chapter 8 Contracts Nature and...

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Chapter 8: Contracts- Nature and Classification Contracts- enforceable agreement entered into voluntary by 2 or more parties - Free to enter or not -most contracts get fulfilled 2 main contracts: 1) Common law- everything else, personal services unique goods, personal services 2) UCC Article 2- sale of good for $500 or more, default contract Nudum Pactum- “naked promise”, in common law, unenforceable, offer to sell something without a corresponding offer of value in exchange Ex) professor and student go out on date, prof. promises to love forever, never calls Ex) in Nevada- get date for $1000, form a contract, offer and acceptance, under common law contracts I. Elements of Contract Law a. Requirements of a valid contract i. Agreement (offer AND acceptance) ii. Consideration (something of value received or promised to convince person to make a deal) iii. Contractual capacity (competent parties) iv. Legality (accomplish a legal goal that is not against public policy) b. Defenses to enforceability of a contract i. Genuineness of assent - not enforceable if contract is result of fraud, mistake, or duress ii. Form- must be in correct form the law requires (ex: written in some cases) II. Types of Contracts a. Bilatera l (“promise for promise”) i. An exchange of promises, you seek someone out and negotiate ii. Ex: one person agrees to buy another person’s automobile for a specified price iii. Comes into existence the moment promises are exchanged b. Unilateral i. Offer is phased so that the offeree can accept only by completing the contract performance, a “promise for an act” ii. Ex: contests, lotteries, and other competitions, “I’ll give you 2$ to whoever gets me a coke” c. Revocation of offers for unilateral contracts -free to take/not take -once performed, person bound to pay
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d. Formal vs. Informal contracts i. Formal- require a special form or method of creation to be enforceable ii. Informal - (simple contracts) include all other contracts, no special form required e. Express vs. Implied contracts i. Express- stated in words, oral or written ii. Implied - implied in actions, “implied in fact”, conduct of parties, rather than their words, creates and defines at least some of the terms of the contract. Ex) doing something in exchange for a number of years, implied to keep going Ex) Prof relax in hammock, boy mows lawn, expects pay, prof gives high five ($ is implied when boy mows lawn, prof didn’t stop him, so $ is owed to boy) f. Contract performance i. Executed contract - has been completely performed by both parties ii. Executory contract - not as yet been fully performed g. Contract enforceability i. Valid contract - has necessary 4 elements, enforceable by both parties ii. Voidable contracts- valid but can be avoided at the option of one or both of the parties (ex: contracts made by minors are voidable at the option of the minor) iii.
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