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Business Law 201 Notes

Business Law 201 Notes - EXAM 2 NOTES Outline Chapter 10 I...

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EXAM 2 NOTES Outline Chapter 10: I. Common Law Contracts – they provide rules, knowing what to agree to is very important and is contained in contracts. Contract = a “promise” or a set of promises for the breech of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. A. Elements - Let’s open up the frog; Dissect frog, giving us something we know (contracts) and opening them up to us, more to it than meets the eye. 1. Offer –BRAIN, idea comes from of the whole contract. What, where, how much, details! Offer-‘OR’ = I’ll sell you my car for $20,000 Accept… ‘EE’ = Yes --->Consideration stitches these two parts (offer & acceptance) together, on both the offer and the acceptance, what commits them to the legally binding agreement, shows that the parties are really committed. 2. Acceptance HEART 3. Consideration GUT B. Special Terms used to describe the contract. 1. Bilateral- parties are exchanging rights and obligations in the form of promises. If the offeree can accept simply by promising to perform. A “promise for a promise”. 2. Unilateral- promise in exchange for an act. Ex: I will give these shoes to the first person that gives me $50. Person accepts the promise by giving the $50 is the act; performance of obligation, it is your acceptance, and consideration (what demonstrates commitment). If the offer is phrased so that the offeree can accept the offer only by completing the contract performance . “Promise for an act” 3. Valid- one that is legally enforceable. -must have these elements to be valid; 1.) an agreement consisting of an offer and an acceptance of that offer 2.) supported by legally sufficient consideration
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3.) made by parties who have the legal capacity to enter into the contract 4.) made for a legal purpose 4. Voidable- a valid contract but one that can be cancelled by one or both of the parties. 5. Unenforceable- will not be enforced by the courts because of certain legal defenses against it. 6. Void- no contract exists because one or more of the 3 elements above do not exist, no legal obligations of any of the parties. 7. Express- if all the important terms are stated either verbally or in writing. Ex: Lease for an apartment 8. Implied- the terms arise out of the circumstances surrounding the transaction. The circumstances give rise to the agreement. Ex: Contract with doctor is implied. 9. Executed- both parties have performed their obligation. Ex: Say yes to by the car, give the money, get the car. 10. Executory- a contract that has not been fully performed by the parties. 11. Formal- witnessing of signatures, seals. 12. Informal- most contracts informal, all other contracts informal. II. Special Non-Contract Situations (“toad” not a “frog”, looks like a contract but not a contract). Make something that looks like a contract out of these situations.
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