Bus Law..Spr 2015 POWERPOINT #2

BUSINESS LAW: Friday, February 13, 2015  EQ: Understand contract law.  Understand elements and characteristics of a contract.  Who has ever been offered something?  Who has ever written a contract to buy or sell something?

BUSINESS LAW: Friday, February 13, 2015  What distinguishes a contract from other agreements?  Contracts are enforceable by the courts.  Two things necessary for an agreement which MAY result in a contract…  1. Offer  2. Acceptance

BUSINESS LAW: Friday, February 13, 2015  CONTRACTS = agreements between two or more parties that create obligations  6 major requirements that must be satisfied before courts will treat a transaction as a legally enforceable contract

BUSINESS LAW: Friday, February 13, 2015  1. OFFER AND ACCEPTANCE  Needs to be serious offer to contract  Offeror makes the offer  Offeree is to whom offer made  Definite terms without changes  *To enforce arbitrary terms against parties would be involuntary servitude.*

BUSINESS LAW: Friday, February 13, 2015  2. GENUINE ASSENT  And thus NOT based on  Deception  A mistake  Use of unfair pressure used or exerted to obtain offer

BUSINESS LAW: Friday, February 13, 2015  3. LEGALITY  Must agree too something that is legal  It is not a contract if it is an agreement to commit a crime or a tort.

BUSINESS LAW: Friday, February 13, 2015  4. CONSIDERATION  Both sides involved receive something of legal value as a result of the transaction.  Without this, merely have a promise to make a gift.

BUSINESS LAW: Friday, February 13, 2015  5. CAPACITY  Must be able to contract for self rather than be forced to use parties or legal representatives.  This can have deeper meaning for contracts having to be signed by a particular authority.

BUSINESS LAW: Friday, February 13, 2015  6. WRITING  Some agreements must be placed in writing to be fully enforceable in court.  This is based on contract’s level of importance for the terms therein.

BUSINESS LAW: Monday, February 16, 2015  Offer = proposal by an offeror to do something, provided the offeree does something in return  3 Test a Valid Offer must pass:  1. Contractual intent must be present  2. Offer must be communicated to offeree  3. Essential terms of the offer must be complete and definite

BUSINESS LAW: Monday, February 16, 2015  1. Contractual Intent  Jests  Statements made in Anger or Jest  Preliminary Negotiations  Social Agreement

BUSINESS LAW: Monday, February 16, 2015  2. Offer must be Communicated to Offeree  3. Essential terms must be:  Complete and  Definite!

BUSINESS LAW: Monday, February 16, 2015  6-2 Termination of Offers  Contracts may be terminated in a variety of ways…  Revocation by the offeror (time stated or reasonable length)  Rejection by the offeree (counteroffer, death, insanity, destruction)  Options, firm offers

BUSINESS LAW: Monday, February 16, 2015  6-3 Acceptances  Acceptance must  1. Only offerees may accept  2. Acceptance must match the offer … mirror image rule  3. Acceptance must be communicated to the offeror

Monday, February 23, 2015 EQ: Understanding contract law.  Closer look at Genuineness of Assent  DURESS and UNDUE INFLUENCE  Focus on the THOMPSON Family  Hot Debate on page 124  What’s Your Verdict on page 125

Monday, February 23, 2015 EQ: Understanding contract law.  Key Terms  Genuine assent = true and complete agreement  Voidable = can cancel what have put into contract and get it back  Rescission = name of action when voiding  Ratification = conduct suggesting you intend to be bound by contract

Monday, February 23, 2015 EQ: Understanding contract law.  DURESS  Defined as occurring when one party uses an improper threat or act to obtain an expression of agreement; Examples:  1. threats of illegal conduct  2. threats to report crimes  3. threats to sue  4. economic threats

Monday, February 23, 2015 EQ: Understanding contract law.  WHAT IS YOUR MOST VALUABLE MATERIAL GOOD (-- NEEDS TO BE SOMETHING WITH A HIGH DOLALR AMOUNT)??  Under what forms of duress would you be sell this GOOD for 1/10 th of its actual value??

Monday, February 23, 2015 EQ: Understanding contract law.  The story of the IRS and Stan  Undue Influence and Assent  What’s your Verdict? Page 126  Undue influence = occurs when one party to the contract is in a position of trust and wrongfully dominates the other party.

Tuesday, February 24, 2015 EQ: Understanding contract law.  Lesson …  Jane, Mike and skateboard sale  Unilateral/Mutual –Fact/Law grid  Bugliosi/WYV – where does this fall?

Tuesday, February 24, 2015 EQ: Understanding contract law.  Types of Contractual Mistakes  Unilateral Mistake  Mutual Mistake  Material Facts  Examples  Void

Tuesday, February 24, 2015 EQ: Understanding contract law.  Misrepresentation  Innocent misrepresentation  Fraudulent misrepresentation  3 part test on misrepresentation  1. Untrue statement of fact  Active concealment, silence  2. Materiality  3. Reasonable reliance

Tuesday, February 24, 2015 EQ: Understanding contract law.  Fraud and Remedies for:  Misrepresentation must be intentional or reckless  Misrepresentation/concealment INJURES  Remedies for Fraud include:  Recission  Damages  Punitive Damages