contract_law_IBL chap2 - ILB 302: International Business...

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ILB 302: International Business Law YU FALL 2011 February 2011 Chapter 2: CONTRACT LAW Contract law Part of the common law series Contract formation Offer and acceptance · Mailbox rule Mirror image rule · Invitation to treat Firm offer · Consideration   + Intention to enter into a contract + Formalities Defenses against formation Lack of capacity Duress · Undue influence Illusory promise · Statute of frauds Non est factum Excuses for non-performance Mistake · Misrepresentation Frustration of purpose · Impossibility Impracticability · Illegality Unclean hands · Unconscionability Remedies Page 1
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Specific performance Liquidated damages Penal damages · Rescission Other common law areas Tort law · Property law Wills , trusts and estates 1) What is a Contract? Page 2
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A contract is an exchange of promises between two or more parties to do, or refrain from doing, an act which is enforceable in a court of law . It is a binding legal agreement. That is to say, a contract is an exchange of promises for the breach of which the law will provide a remedy. Agreement is said to be reached when an offer capable of immediate acceptance is met with a "mirror image" acceptance (ie, an unqualified acceptance). The parties must have the necessary capacity to contract and the contract must not be either trifling, indeterminate, impossible or illegal . 2) Contract Formation In common law systems, the five key requirements for the creation of a contract are: 1. offer and acceptance (agreement). 2. consideration . 3. an intention to create legal relations. 4. legal capacity . 5. formalities . Page 3
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In civil law systems, the concept of consideration is not central. In addition, for some contracts formalities must be complied with under what is sometimes called a statute of frauds . 2.1) Offer and acceptance The most important feature of a contract is that one party makes an offer for an arrangement that another accepts. There must be evidence that the parties had each from an objective perspective engaged in conduct manifesting their assent , and a contract will be formed when the parties have met such a requirement. An objective perspective means that it is only necessary that somebody gives the impression of offering or accepting contractual terms in the eyes of a reasonable person , not that they actually did want to form a contract. Offer and acceptance does not always need to be expressed orally or in writing. An implied contract is one in which some of the terms are not expressed in words. This can take two forms. A contract which is implied in fact is one in which the circumstances imply that parties have reached an agreement even though they have not done so expressly. For example, by going to a doctor for a checkup, a
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This note was uploaded on 05/27/2011 for the course BUSINESS 401 taught by Professor Dr.rams during the Spring '11 term at Kentucky State University.

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contract_law_IBL chap2 - ILB 302: International Business...

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