Lesson 7-1 Quiz Review

Who are the 2 parties involved in a contract offer and acceptance? Offeror: Person who “makes” the offer Offeree: Person who “Accepts” the offer Counteroffer: When the original offer is changed by either party (Ends the offer)

What are the 3 elements of an offer The offer made was serious and legal The terms of the offer were definite and complete The offer was communicated to the offeree

How many parts are there in a valid contract? 6 Offer and Acceptance, Genuine Assent, Consideration, Capacity, Legality and Writing

How is offer and acceptance defined? Both parties accept the agreement on “Mutually acceptable terms” All 3 elements of a proper offer are verified as well as all 3 elements of acceptance First step in creating a contract

How is Genuine Assent defined? Agreed terms based on not being forced (Duress), misled (Misrepresentation/Fraud) or a mistake Key is you entered a contract under your own free will and decided based on correct facts

How is Consideration defined? Both sides to an agreement “Gain” something fair Fairness means they got what they expected Value of the trade is based on what the parties determine is fair before agreement

How is Capacity defined? Ability to enter a contract by understanding your own actions You can make decisions on your own Protects minors, mentally incapacitated people

How is Legality defined? The contract is legal Anything within a contract that is illegal can void the contract even if the rest is legal Illegal contracts are void

How is Writing defined? Some contracts must be written to be considered valid Most contracts are not written and are valid (Cash register)

Preliminary Negotiations vs. offer Preliminary Negotiations are not offers, but rather attempts to induce someone into a contract They are not specific many times and usually do not have the intent needed to make an agreement

Social agreements Social agreements are things like dating or going out with your friends Not contracts because no exchange of value

Essential information in terms Essential information is all the details needed to make an agreement clear Names of parties, price, pay method, details of goods, and signature (If in writing)

Essential information in terms Essential information is all the details needed to make an agreement clear Names of parties, price, pay method, details of goods, and signature (If in writing)