Business Law Essay

Submitted By james4sythe
Words: 737
Pages: 3

Nature and Terminology
Contract law - the formation and keeping of promises-legally binding
Source of contract law-common law-except where modified or replaced by statutory law -UCC -sale or lease of goods, checks or administrative law
Two parties
Promissor - making the promise - PR
Promissee - person to whom the prime is made - PE
Contract - agreement between two parties (or more) is legally binding, agree to perform or refrain from performing an act now or in the future
Objective theory of contacts - element of intent is very important - judged by outward objective facts - as interpreted by a reasonable person standard
Objective - One answer, subjective - multiple answers
Three factors
What the party said
How the party acted or appeared
Circumstances surrounding the transaction
Elements (Requirements)
Agreement - Need an offer and an acceptance (more in chapter 12)
Consideration - Must be supported by legally sufficient bargained for value (more in chapter 13)
Contractual capacity - must have this (age, sober, lack mental capacity) (more in chapter 14)
Legality - must be (contract’s purpose) to accomplish a goal that is legal and not v. public policy (more in chapter 14)
Let’s assume we meet all four requirements - possible defenses
Voluntary consent - both parties agreed (more in chapter 15)
Contract must be in a form with respect to whatever the law requires (more in chapter 16)
Contract classification
Bilateral contract v. unilateral contact
Bilateral - Promise for a promise eg one part offeror makes a promise, offered may accept by promising to perform, contract exist at the moment promise made
Unilateral contract if the offer can accept the offer by performance (promise for performance)- contract exist moment contract is performed
Potential problem - PR attempts to revoke (take back) the offer after the PE began performance
Present view - offer to perform becomes irrevocable once performance has begun
Formal v. informal
Formal - contact that requires special forms or method or formation, to be enforceable
Informal - simple contract - no special form is required
Express v. Implied
Express - specific terms of agreement are fully and explicitly stated in words, oral, or written
Implied - contract is implied from the conduct of the parties
For implied, need three elements
P must furnish some service or property
P expected to be paid for that service or property and D knew or should have known that payment was expected
D had chance to reject the services or property and did not
Executed v. executory
Executed - fully performed by both parties
Executory - not fully performed by both parties
Contract enforceability
Valid contact- one that has all four elements
Voidable contract- valid contract, one of the parties may be able to avoid the contract at their option (or both) can avoid it or ratify it
Minor - contact may be unenforceable because of certain legal defense
Void contract - not a contract at all, no legal obligation to any…