BUS311_chapter_04

Dana has paid seventy five cents for a copy of a

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Unformatted text preview: with him. In each of the above situations, an implied contract has been entered into. Dana has paid seventy-five cents for a copy of a newspaper and Steve has agreed to pay the selling price of the screwdriver to Dana at a later time. Bilateral Contracts v. Unilateral Contracts If the offeror (the person who makes an offer to enter into a contract) and offeree (the person to whom a contract offer is made) exchange promises to perform some act in the future, a bilateral contract is formed. For example: Example 4.4. Bruce offers to sell his old car to Irving if Irving will pay him $2,000. Irving accepts the offer. Example 4.5. Lina offers to babysit for Inga every Saturday for the next three months if Inga will pay her $8.00 per hour. Inga accepts. Example 4.6. Tina offers to sing at Charles’s club next Friday, Saturday, and Sunday if he will pay her $5,000 per night. He agrees. In each of the above examples, both parties are obligating themselves to take some action in the future. As soon as the offer is accepted, a valid contract comes into existence. When a bilateral contract is involved, the contracting parties exchange mutual promises to perform some future act. As soon as a bilateral contract offer is accepted, a contract comes into existence and both parties are bound. If either party fails to live up to the agreement, a suit for breach of contract can result. In a unilateral contract, one party makes a promise to the other that can only be accepted by the other’s performance. For example, if Lana offers to pay $100 to anyone who finds and safely returns Fluffy, her lost cat, Fred can accept and form a contract only by actually returning Fluffy safely to Lana. If Fred tells Lana, “I’ll find Fluffy later, I promise,” there is no acceptance, and no contract. rog80328_04_c04_062-088.indd 67 10/26/12 5:42 PM Section 4.1 Types of Contracts CHAPTER 4 Simple Contracts v. Formal Contracts A simple contract is any oral or written contract that is not required to follow a specific form, or be signed, witnessed, or sealed. The vast majority of contracts entered into by businesses and private indivi...
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This test prep was uploaded on 04/09/2014 for the course BUS 311 taught by Professor Parker during the Spring '10 term at Ashford University.

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