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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.
- Spring '10
- Business Law