ADMS2610-Session2-Ch7 - ADMS2610 Session 2 Chapter 7(pg...

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ADMS2610 Session 2 Chapter 7 (pg. 120-135) Law of Contract Contract - Is an agreement made between two or more persons that is enforceable at law - Freedom of contract, the general ability of the parties to create specific rights and duties that the courts will enforce o Create own laws that they are obliged to follow Historical Development of the Law of Contract - Is essentially an area of law relating to business transactions - Merchant Law o Decline of the feudal system - Ecclesiastic Law o Disputes arising out of informal contracts or agreements of a breach of a solemn promise - Manor Courts o Handled minor cases (breach of contract) o Damages were sometimes awarded for breach of the promise - 17 th century development of the bargain theory of contract o Each party to the agreement derived some benefit from the agreement in return for a promise to do or give something in return Formed the basis of contract law Elements of a Valid Contract - Requirements must be met for a contract to be enforceable by the courts - (1) An intention to create a legal relationship - (2) Offer - (3) Acceptance - (4) Consideration - (5) Capacity to contract - (6) Legality - Certain types of contracts must be in writing - Needs these six elements in order to be valid and binding - Must be free from any form of mistake or misrepresentation or undue influence or duress - Intention to be bound (the assumption at law that strangers intend to be bound by their promises) Intention to Create a Legal Relationship - Concept of a contract is based on the meeting of two parties minds on the terms and conditions that will form their agreement with each other
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o Each will agree to do or not to do certain things in return for the promise of the other to do something - Essential element is a promise o Consensus ad idem (agreement as to the subject or object of the contract) o Parties must be of one mind and their promises must relate to that subject or object o Promise begins this process - First requirement for a valid contract must be the intention on the part of the promisor to be bound by the promise made o This intention to create a legal relationship is an essential element of a valid contract - Intention to create a legal relationship is a presumption at law o Creation of the intention would be difficult to prove o This presumes that the party intended to be bound by the promise shifts the burden to prove otherwise, if the intention did not exist
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This note was uploaded on 03/25/2011 for the course ADMS 2610 taught by Professor Joshuasera during the Winter '10 term at York University.

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ADMS2610-Session2-Ch7 - ADMS2610 Session 2 Chapter 7(pg...

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