CHAPTER 10 STUDY GUIDE FOR TEST

CONTRACTS ARE….. Legal links between producers and consumers that help to get most of the worlds work done.

AN OFFEROR IS… The one who MAKES the offer to contract.

AN OFFEREE IS… The one that may accept the contract but is not required to do so.

TO NULLIFY OR VOID CONTRACTS Minors can at anytime If a contract is made between a minor and an adult only the minor can disaffirm.

AN ADVERTISEMENT IS… NOT an offer to sell even when the advertiser is eager to make sales.

PROPERLY MADE OFFER May be ended by  Acceptance  Rejection  Modification  Counteroffers  Death or Insanity  Time Stated

FIRM OFFERS Binding Must be in Writing Only by Merchants Definite Time-No Longer than 3 months No money needed to keep the offer open  QUESTIONS 7 and 11

CAN NOT MAKE CONTRACTS Intoxicated by drugs or alcohol (this doesn’t mean anyone who uses) Insane or mentally deranged Minors

MINORS MAY VOID OR NULLIFY BECAUSE … To protect minors from exploitation, fraud, and dishonest persons. They lack knowledge needed to enter into contracts wisely Lack maturity, experience, and overall ability needed.

A VALID OFFER IS? Must know these 3 things.  Must Intend to create a legal obligation  The terms must be definite and complete  Must be communicated to the offeree

AN OFFER TO CONTRACT, IF NOT ACCEPTED IS ENDED BY Time stated or reasonable length of time (perishable goods) Rejection (saying No Thanks) Counteroffers Revocation (taking it back before the offeree does anything) Modification Death – Not illness

ACCEPTANCE OF AN OFFER TO CONTRACT MUST BE… COMMUNICATED to the OFFEROR

EXCEPTIONS TO THE REQUIREMENT OF DEFINITENESS Exceptions: Medical or Legal Services No Exception must be Definite Employment contracts  Sale of land  Sales by merchants

A VALID CONTRACT CAN BECOME UNENFORCEABLE WHEN… The time to sue has elapsed because of statute of limitations Defendant has gone bankrupt and there are no assets to get. Defendant dies and there are no assets.

ADD TO THE BOTTOM OF YOUR STUDY SHEET. Option Offer  Giving something of value to keep the offer open (selling a house and they give you $5000 to not sell it to someone else) Unilateral Contracts  Only one party makes the contract (Reward $100 to find my dog) Bilateral Contracts  2 or more people make a contract An agreement is NOT a Contract Capacity to contract means  A person has the ability to understand his or her actions