Chapter 10

Chapter 10 - Chapter 10 Introduction to Contracts What is a...

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Chapter 10 Introduction to Contracts
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What is a Contract? A contract is an enforceable agreement. Note that not all agreements are enforceable: Promises of a future gifts are generally not enforceable. Gambling agreements are not enforceable in most states.
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Function of Contract Law To provide predictability for the affairs of business. To provide some assurances that promises will be kept and to provide a remedy when they are not. Punishment is not an element of contract law.
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Basic Requirements of a Contract Agreement Consideration Contractual Capacity Legality
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Defenses to Enforcement Genuineness of Assent Essentially, there was no agreement in the first place, due to fraud, mistake, or duress. No consideration Both parties did not give something of value in exchange for the promise of the other. Lack of capacity One of the parties was not of legal age or was mentally incompetent when the contract was formed.
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Defenses to Enforcement Illegality The subject matter of the contract is illegal. Form The contract was not in the required form. Usually, this means that it was not in writing and the subject matter of the contract was one of the few that require it be in writing.
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Terminology Offeror One who makes an offer to enter into a contract Offeree The one to whom the offer is made Executed The contract has been fully performed Executory At least one party has not fully performed
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Types of Contracts Bilateral (most contracts) The offer is a promise to perform and invites a promise in return a promise for a promise Unilateral (a few special types of contracts) The offer is a promise to perform and invites only performance a promise for an act Cannot be revoked during performance
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This note was uploaded on 04/09/2008 for the course BUS 340 taught by Professor Langenderfer during the Spring '08 term at Meredith.

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Chapter 10 - Chapter 10 Introduction to Contracts What is a...

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