Contracts Chapter 5

Why you need to know Identifying a contract’s elements will help you manage your affairs in an intelligent and effective manner Identifying a contract’s elements will help you manage your affairs in an intelligent and effective manner

Intro to Contracts Describe any contracts you may have entered in the past month? Between you and friend Between you and your parents Between you and sibling Between you and a store Between you and a credit card company Between you and a phone company

Three theories Equity theory Will theory Formalist theory

Six Elements Figure 5.1 Offer Acceptance Genuine Agreement Consideration Capacity Legality

Characteristics Valid, void, voidable, or unenforceable Legal, missing elements, legal but able to be voided, law Express or Implied Stated in words, actions of parties Bilateral or Unilateral Two sided promise, one sided promise Oral or Written Word of mouth, in writing

What if? What if all contracts had to be in writing to be enforceable?

POP QUIZ!!! - QUESTION Sarah paid Isabel $50 to hack into Mrs. Wojcik’s computer files for a copy of the upcoming final exam, but Isabel gave Sarah a copy of the pretest instead. Is this contract valid, void, voidable, or unenforceable?

POP QUIZ!!! - ANSWER Sarah paid Isabel $50 to hack into Mrs. Wojcik’s computer files for a copy of the upcoming final exam, but Isabel gave Sarah a copy of the pretest instead. Is this contract valid, void, voidable, or unenforceable?

Requirements of an Offer Serious intent Invitations to negotiate (page 114, example 3) Definiteness and certainty “fair share”, “reasonable”, “some” Communications to the offeree Example 5 page 116

Requirements of Acceptance Unconditional Acceptance The mirror image rule Counteroffer (change in roles) Uniform Commercial Code (UCC) Non merchant Merchant No crucial difference No objection Limited acceptance in original

Requirements of Acceptance Methods of Acceptance Time Implied by past practice Stated in offer By action See example 7 on page 119

Termination of an Offer Revocation Taken back Rejection Refusal Counteroffer Ends first offer and puts another on the “table” Expiration of Time Set in offer Death or Insanity Only an offer, not an contract

Write an offer Pair up Write down an offer on a sheet of paper that does not meet all three requirements.