Dana has paid seventy five cents for a copy of a

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

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.

Ask a homework question - tutors are online