bu206w5scripts

bu206w5scripts - BU206 Week 5 Notes S2 A contract is an...

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BU206 Week 5 Notes S2 A contract is an agreement; but it is a legally enforceable agreement. Some agreements and promises are just that – agreements; if you break (or breach, as it is called in contracts) you have done something perhaps morally wrong, but not necessarily a legal breach. The promisor is the person making a promise; the promise is someone to whom a promise is made. A bilateral contract is a promise for a promise (John promises to take Bill to the park; Bill promises to pay John $5). A unilateral contract is a promise for performance. The distinction between bilateral and unilateral isn’t crucial anymore. An express contract is a contract whose terms are fully stated; an implied contract is a contract whose terms are inferred from the parties. A valid contract is one that is enforceable; a void contract is a contract that cannot be enforceable; a voidable contract, is a contract that can be voided at the option of one of the parties. One other point - except in certain cases (which we shall discuss later), contracts do not have to be in writing to be valid. Oral contracts are enforceable. Now, oral contracts are hard to prove in the event of a dispute; but they are valid. S3 A contract requires an offer and an acceptance. In addition, it must have consideration – value must have been exchange. Capacity concerns the legal ability of the parties to contract, primarily age and mental capacity. Legality concerns the subject matter of the contract. Common defenses to contracts include that “I didn’t agree” or that the contract didn’t meet form requirements (such as it wasn’t in writing, if it was the type of contract that had to be in writing). S4 The key to whether there is an offer is whether the offeror had a serious intention to be bound. Saying “that watch might be worth $1,000” is not an offer; “I’d like to buy your car when I get the cash” is not an offer; “would you take $400 for your ring” is not an offer; A newspaper advertisement is not an offer to sell. Now there are other laws that affect advertisement such as “bait and switch” (advertising one thing cheaply to lure people into your store, and then not delivering the good) and other consumer protection laws; these laws generally prevent a business from not delivering on what it advertises. But, from a contract law standpoint, an advertisement is just an invitation to negotiate.
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The terms of an offer must be reasonably certain; this includes price. The offer must also be communicated to the offeree. If John tells Sue “I want to buy Mary’s stamp collection for $600” that is not an offer because John didn’t communicate it directly to the offeree, Mary. S5
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This note was uploaded on 09/10/2011 for the course BU 206 taught by Professor Rolfes during the Spring '11 term at Herzing.

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bu206w5scripts - BU206 Week 5 Notes S2 A contract is an...

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