BL-Chapter 11 - 1 CHAPTER 11 CONSIDERATION AND PROMISSORY...

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CHAPTER 11 CONSIDERATION AND PROMISSORY ESTOPPEL Special Business Contracts -The law imposes an obligation of good faith on the performance of the parties to requirements and output contracts Business contracts that specifically allow a greater degree of uncertainty concerning consideration: Output Contracts -The seller agrees to sell all of its production to a single buyer -Output contracts serve the business purposes of: 1. Assuring the seller of a buyer for all of its output 2. Assuring the buyer of a source of supply for the goods it needs Requirements Contracts - One in which a buyer contracts to purchase all the requirements for an item from one seller - Requirement contracts serve the business purposes of: 1. Assuring the buyer of a uniform source of supply 2. Providing the seller with reduced selling costs - Ex. Ford enters into a contract with Firestone tire to buy all the tires it will need this year from Firestone. 1
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Best-Efforts Contracts - Is a contract that contains a clause that requires one or both of the parties to use their best efforts to achieve the objective of the contract -The courts have held that the imposition of the best-efforts duty provides enough consideration to make a contract enforceable -Ex. A real estate listing contract often requires a broker to use his best effort to find a buyer. Not regarded as illusory.
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This note was uploaded on 04/21/2011 for the course BUS LAW 320 taught by Professor Soos during the Spring '10 term at Rutgers.

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BL-Chapter 11 - 1 CHAPTER 11 CONSIDERATION AND PROMISSORY...

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