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Test 2 Review - Test 2 Review 1 Every contract involves at...

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Test 2 Review 1. Every contract involves at least two parties. The parties involved in a contract are the offeror and the offeree. The offeror is the party who makes an offer to enter into a contract. The offeree is the party to whom the offer is made. The offeror makes an offer to the offeree, and the offeree has the power to accept the offer and create a contract. 2. For a contract to be enforceable there are four basic requirements that must be met. a. Agreement - To have an enforceable contract, there must be an agreement between the parties. This requires an offer by the offeror and an acceptance of the offer by the offeree. b. Consideration - The promise must be supported by a bargained-for consideration that is legally sufficient. Gift promises and moral obligations are not considered supported by valid consideration. c. Contractual capacity - The parties in a contract must have contractual capacity. Certain parties, such as a person adjudged insane, don’t have contractual capacity. d. Lawful object - The object of the contract must be lawful. Contracts to accomplish illegal objects or contracts that are against public policy are void. 3. Restatement of the law of contracts is a compilation of contract law principles as agreed upon by the drafters. The restatement is not law; however lawyers and judges often refer to it for guidance in contract disputes because of its stature. A judge has to use it to make it a law. 4. A bilateral contract is when an offeror’s promise is answered with the offeree’s promise of acceptance. In other words, a bilateral contract is a “promise for a promise.” This exchange or promises creates an enforceable contract, but not act of performance is necessary to create a bilateral contract. Plus, the contract starts when stated. A unilateral contract is when the offeror’s offer can be accepted only by the performance of act by the offeree. There is no contract until the offeree performs the requested act. An offer to create a unilateral contract cannot be accepted by promise to perform. It is a “promise of an act.” This contract cannot be revoked until said time of when the contract starts. 5. A unilateral contract is formed by the performance of the requested act. A unilateral contract is a promise of an act. 6. An offer to create a unilateral contract can be revoked by the offeror any time prior to the offeree’s performance of the requested act. The offer cannot be revoked if the offeree has begun or has substantially completed performance/act.
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