Exam Review 2 - I, Basic Contracts Contract law is a...

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Unformatted text preview: I, Basic Contracts Contract law is a foundation for learning about many subjects in the law and is a vocabulary intense subject. In all subjects of business law- contracts is considered the most significant Contract Law Dichotomy Parties have freedom to make a contract and freedom to not make one One should define terms We can describe contracts as a type of private (consensual) law made by the parties them selves A contract is a legally enforceable agreement : something that will be enforced by the court The most important freedom, at least in American contract law, is the freedom of the parties to a contract to make their own little private contract laws- for individual parties to change or avoid the effects of various contract law principles. Expectations and efficiencies Contract law is a framework to ensure that lawful expectations are met or that remedies are provided Contract law reduces transaction costs in 3 ways: 1. It encourages the performance of voluntary agreements by providing a sanction for breach 2. It reduces negotiation costs by providing standard, or customary, terms for various types of transactions 3. It discourages misleading conduct in contract negations Contract law is necessary for business deals in that it ensures the other party will act as agreed It furnishes Legal Clout when the ethical restraints of carrying out ones word are not enough to outweigh a partys new perception that the contract is against his/her economic self interest, then perhaps the fear of litigation will keep that party form acting on its temptation to breach Elements of a Contract The principles of contract are generally the same for all contracts, no matter the size. 3 elements of a contract: Offer, Acceptance, and Consideration Requirements of an offer 1. It must indicate a clear intent to make a contract 2. It must be sufficiently definite so that a court can determine the actual intent of the parties 3. It must be communicated to the other party-Offer + Acceptance = Agreement then there must be some exchange of promises or property or services, or there must be some other mutual alternation of duties a quid pro quo-Parties lacking capacity include minors, the mentally ill, the mentally retarded, and the obviously inebriated.-Capacity is not a question for the court to anwer by reviewing whether one side was more capable than the other. As long as you meet the capacity definition generally (e.g. you are an adult, not drunk or mentally retarded, ect) that is sufficient-Most contracts need not be in complex language- in fact, most do not have to be written . Contract Wording -A typical US view is that a contract defines the rights and responsibilities of the parties and seeks to cover all possible contingencies- Japanese tend to write generalized contracts that contain very little detail because the parties know each other well and are confident that the details can be worked out as and when they are necessary. The traditional Japanese view is that a contract is a secondary in business transactions. The specific details of traditional Japanese view is that a contract is a secondary in business transactions....
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Exam Review 2 - I, Basic Contracts Contract law is a...

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