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Exam2.StudyGuide - Exam2.StudyGuide Chapter 8 Requirements...

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Exam2.StudyGuide Chapter 8 Requirements of a Valid Contract (List 4 Requirements)** 1. Agreement : must include the offer and an acceptance 2. Consideration : something of value must be exchanged 3. Contractual Capacity : Law must recognize both parties as having competency to enter the contract 4. Legality : Goal of the contract must be legal & not against public policy Even if all 4 are present, the contract can still be unenforceable if the following 2 aren’t met: 1. Volunary consent or genuineness of assent 2. Form (in whatever format the law requires) Types of Contracts FORMATION: 3 classifications are based on how and when a contract is formed Offeror: party making offer – makes promise to do or not do something Offeree: party to whom the offer is made Bilateral/Unilateral difference is based on what the offeree must do to accept the offer & bind the offeror to a contract Bilateral : contract formed at the moment when promises are exchanged. (I’ll buy your car – contract even before money changes hands) Unilateral : contract is formed at the moment when the contract is performed (if you drive my car there, I’ll give you $$-- only on completion of the act is the offer fully accepted) - -contests, lotteries, etc Once performance has been substantially undertaken, the offeror cannot revoke the offer. Formal contracts : form or method of created needed to be enforceable – negotiable instruments : checks, drafts, promissory notes, letters of credit Informal contracts : (“simple contracts”) all other contracts. No special form is required – based on substance of the contract rather than form. Typically contracts are put in writing for proof just in case, though. Express contract : terms of agreement are stated in words-oral or written- signed lease for apt, accepts offer on myberea Implied in fact : conduct of the parties creates & defines at least some of the terms of the contract. Certain requirements must be met: 1. Plaintiff furnished some service/property 2. Plaintiff expected to be paid in full for that service/prop, and defendant knew or should have known that payment was expected 3. Defendant had a chance to reject the services or property and didn’t PERFORMANCE: also classified according to their state of performance Executed contract : contract that’s been completely performed by both parties Executory Contract : contract that hasn’t been fully performed yet. (can be half and half) ENFORCEABILITY: Voidable contracts : is a valid contract, but one that can be legally avoided (canceled or annulled) at the option of one or both of the parties. (contracts made by minors are voidable at the option of the minor) Unenforceable contract : valid contract rendered unenforceable by some statue or law (some required to be in writing. If they aren’t, they’re unenforceable except for exceptional circumstances) Void contract : not a contract. (someone determined insane or purpose of the contract was illegal, etc) Bilateral : promise for a promise Unilateral : promise for an act Formal : Requires special form for creation Informal
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