Did YOU Know?!? On some Caribbean islands, the oysters can climb trees. New York’s Central Park is nearly twice the size of the entire country of Monaco. Ketchup was sold in the 1830s as medicine. The U.S. military’s dried food rations can be re- hydrated with urine.

Unit VI: Consumer Skills Lesson 2

Target D Target D: I can describe common types of contracts and the implications of each

Contracts A contract is an agreement between competent parties in which each promises to take or avoid a specified action There are legal ramifications for failing to comply with a contract

Contractual Relationship A contractual relationship is evidenced by: an offer, acceptance of the offer, and a valid (legal and valuable) consideration Each party to a contract acquires rights and duties relative to the rights and duties of the other parties However, while all parties may expect a fair benefit from the contract (otherwise courts may set it aside as inequitable) it does not follow that each party will benefit to an equal extent

Contract Validity For a contract to be valid- or legally enforceable- all of the conditions mentioned in the contracts need to be met The three basic conditions found in all contracts include: Agreement between parties: the parties must agree on conditions Competence: All parties must be competent, or capable of understanding the terms and consequences Mutual exchange: There must be consideration, or a benefit, that each party provides for one another

Sales and Service Contracts Sales contracts and service contracts are agreements that include the service provided on items sold, the selling price, how it will be paid, and the date and location of the transaction These contracts generally give the buyer the opportunity to inspect the goods and refuse them if there is sufficient reason

Employment Contracts A contract of employment is a category of contract used in labor law to attribute right and responsibilities between parties to a bargain The contract is between an "employee" and an “employer.” It has arisen out of the old master-servant law, used before the 20th century It states such things as duration of employment, salary, responsibilities for both parties, special clauses, etc.

Lease A lease is a written contract in which a property owner gives temporary use of that property to another party Terms of leases will include the length of the contract, the amount of rent, and how often payment will be made

Confidentiality Agreement A confidentiality agreement- also called a non- disclosure agreement- binds parties to secrecy It usually concerns employees, investors, or others who a business owner needs to share sensitive information with Confidentiality agreements describe the specific information that is considered confidential and how the parties may or may not use the information

Collective Bargaining Collective bargaining is a negotiation between workers and their union representatives on one side and employers represented by management on the other. The result of the negotiation is a labor contract, usually called a collective bargaining agreement If the problem is not resolved it may go to an arbitrator-someone trained to settle disputes

Verbal Contracts Verbal-or spoken- contracts may be valid It is usually safer for both parties to put the contract in writing This way there can be no misunderstanding Some contracts, such as the sale of land, must be in writing in order to be valid

Successful Verbal Contracts A successful verbal contract can be achieved by incorporating the following elements: Mutual consent and understanding: both parties are cognizant about what they are agreeing to. Offer and acceptance: one party is proposing something that the other party may accept under certain conditions. Mutual consideration: there must be an exchange of valuable goods, rights or services. Performance: the contractual parties have certain duties to perform Good faith: the parties should not attempt to enter into a verbal agreement to cheat each other or to break the law

Breach of Contract Failing to carry out the conditions in a contract is referred to as breach of contract In breach of contract, the violator must agree to carry out the agreed-upon terms In any case, the violator may be forced to pay damages- a payment to reimburse the injured party for a loss Seeking remedy for this is costly and should only be taken with an attorney’s advice