Business Law Chapter 10

Business Law Chapter 10 - Business Law Chapter 10...

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Business Law Chapter 10 Introduction to Contracts Contracts: The Purpose of a Contract - Parties enter into contracts attempting to control future. They exist to make business matters more predictable. o Most contracts work out because parties fulfill their obligations, not all though Judicial Activism versus Judicial Restraint - In most cases, courts will generally but not always do what we expect o They will enforce a contract even it causes serious harm to another. This is called judicial restraint – a court’s reluctance/passive stance to interfere with a contract weather the deal of contract was foolish or not. Judges stance is that it is NOT their job to rewrite a deal that the parties crafted Judicial constraint makes the law less flexible, but more predictable - In other cases, courts practice judicial activism – a court will ignore certain provisions of a contract or an entire agreement if the judge believes that enforcing the deal would be unjust o A judge may also rewrite contract with no provisions if he believes that is the only way to avoid injustice. Ie: can be used in cases where one party deceives another However a judge MAY NOT diminish our ability to control our own future – which is the whole point of creating a contract. Judicial activism makes law more flexible but less predictable Issues and answers - A contract has 4 elements
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o Agreement – one party must make a valid offer, and the other party MUST accept it o Consideration – there has to be bargaining that leads to an EXCHANGE between parties o Legality – the contract MUST be for a LAWFUL purpose o Capacity – parties must be adults of sound mind - Issues that raise questions in contracts are: o Consent – neither party may trick or force the other into the agreement o Written consent – some contracts must be in writing to be enforceable o Third party interests – some contracts affect people other than the parties themselves o Performance and discharge – if a party fully accomplishes what contract requires, his duties are DISCHARGED o Remedies – court will award money or other relief to a party injured by a breach of contract All Shapes and Sizes - Contracts can be large or small ie: Lockheed vs. Boeing or Roommates selling bike. - Contracts can involve public issues or private issues - Societal issues can SHAPE contract law. AND contract law can SHAPE society Contracts Defined - Contract law is a study in promises. It is a promise that the LAW will enforce o This is because we live in a complex society that conducts business in an infinite variety of ways. o
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Business Law Chapter 10 - Business Law Chapter 10...

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