C ONTRACT L AW Read the Planning a Career on pg. 111 With a partner brainstorm 5 other careers/jobs that utilize contracts Create a list and discuss examples of the types of contracts each job deals with Be prepared to discuss one job and contract example with the rest of the class

C ONTRACT L AW - O FFER AND A CCEPTANCE Chapter 6

Courts have become very selective in regards to which cases involving contracts that they are going to take (limited resources) Contracts – agreements between two or more parties that create obligations There are 6 elements to a valid contract 1. Offer and Acceptance (Chapter 6) 2. Genuine Assent (Chapter 7) 3. Legality (Chapter 10) 4. Consideration (Chapter 8) 5. Capacity (Chapter 9) 6. Proper Form (Chapter 10)

N ATURE AND C LASSES OF C ONTRACTS Executed: fully performed, all promises met Executory: not fully performed, promise undone Express: all terms expressly stated (oral or written) Implied-in-Fact: terms implied through acts/conduct Unilateral: based on performance, offeror offers something/offeree offers performance, acceptance is made when performance completed Bilateral: mutual exchange of legally binding promises

R EQUIREMENTS OF O FFER 6.1 The Offer - Must Pass Three Tests 1. Contractual intent must be present 2. Must be communicated to the offeree 3. Terms must be complete and definite

V ALID O FFERS 6.1 Contractual Intent Must be Present – as noted by a reasonable person (in context) Examples of Lack of Intent: Words that are spoken in jest (as a joke) Statements made in anger or terror Preliminary negotiations Social agreements

V ALID O FFERS 6.1 Must Be Communicated to Offeree Person not intended to be offeree can’t accept Person can’t accept without knowing offer has been made Must be acting in response to the offer Essential Terms Must be Complete and Definite At a minimum, identify price, subject matter, and quantity in some way (Real Estate requires more) Each essential term must be identified clearly

T ERMINATION OF O FFERS 6.2 Revocation by the offeror Time stated in the offer Reasonable length of time (depends on product) Rejection by the offeree Counteroffer Death or insanity by either party Destruction of specific subject matter

H OW C AN O FFERS B E K EPT O PEN 6.2 Options: Offeree gives offeror something of value in return for promise to keep offer open Binding contract Offer cannot be withdrawn during option period Firm Offers: Same as option, but for merchants (ind. dealing with goods being bought and sold) These offers are in writing Contains term of open period

V ALID A CCEPTANCE 6.3 Acceptance occurs when a party to whom an offer has been made agrees to the proposal Enforceable acceptance must: Come from person or persons to whom the offer was made Match the terms in the offer Be communicated to the offeror

V ALID A CCEPTANCE 6.3 Only Offerees may accept The Acceptance Must Match the Offer “Mirror-image Rule” Typically enforced if alteration is unimportant

A CCEPTANCE M UST B E C OMMUNICATED TO THE O FFEROR 6.3 Silence as Acceptance: one does not have to reply to offer, silence CAN NOT be taken as acceptance Promises as Acceptance: offers can be accepted by giving promise Promise to deliver topsoil for $65 Performance as Acceptance: offeror requires that the offeree indicate acceptance by performing an action Publicly promise to pay $100 reward for return of lost camera

A CCEPTANCE M UST B E C OMMUNICATED TO THE O FFEROR 6.3 Modes of Contractual Communication – can be made in person, by telephone, mail, delivery service, , fax UCC states acceptance may be made “in any manner and by any medium reasonable in the circumstances” unless otherwise clearly “indicated by the language or circumstances” When Acceptances are effective Typically become effective when sent Business custom often will imply a certain method is used to accept Courts rule that acceptance is effective when sent by the same means, or by faster methods

H OMEWORK – C ASE Q UESTIONS Read Chapter 7 Chapter 6 - #’s 18, 19, 20 – Due Monday 11/18 Chapter 7 - #’s 20, 21, 22 – Due Monday 11/18 Chapter 6 & 7 Vocab Quiz – Wednesday 11/20