BUS311_chapter_04

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Unformatted text preview: ’ll take it.” Every time you buy something, you make a contract. © Getty Images/Jupiterimages/Thinkstock rog80328_04_c04_062-088.indd 66 It is a popular misconception that contracts are not binding unless they are in writing. It’s always a good idea to reduce business agreements to writing to avoid future misunderstandings— and to keep the parties honest as to what it is that they have obligated themselves to do—but most contracts are legally valid whether they are oral or written. Some contracts, such as those creating an interest in real property, are required to be in writing, witnessed, notarized, and sealed in most jurisdictions. But the vast majority of contracts do not need to follow any of those formalities in order to be binding. 10/26/12 5:42 PM Section 4.1 Types of Contracts CHAPTER 4 Implied contracts are formed not by the express words of the parties, but rather by their actions. Think about the last time you bought groceries. Did you tell the checkout clerk, “I offer to buy this gallon of milk at its advertised price?” Probably not, but the clerk understood that you wanted to enter into a contract, and accepted (by ringing up your order) on behalf of the store. As long as the parties’ actions plainly indicate an intention to enter into a contract, and as long as the terms of that contract can clearly be implied from those actions, a binding contract can be created even without a single word being spoken. Consider the following examples: Example 4.2. Dana walks into a newsstand and places three quarters on the counter and takes a copy of her hometown newspaper. Example 4.3. Steve enters Nilda’s hardware store. He picks up a screwdriver from a rack and, looking over at Nilda, who is taking care of a line of customers at the moment, waves the screwdriver in the air. She recognizes Steve, a long-time customer, and understands that he would like to take the screwdriver now and pay for the purchase later. She signals her consent by nodding in his direction. He leaves, taking the screwdriver...
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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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