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Published byRosanna Stokes Modified over 8 years ago
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I can explain and identify all five elements of a valid contract.
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A legally binding agreement between two or more people. Five Elements MUST be present in order for a contract to be valid.
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1. Eating at a restaurant 2. Hiring the 13 year old next door to baby-sit 3. Asking a girl to the prom 4. Getting married 5. A wager on a football game with your friend 6. Turning the heat on in your house 7. Taking a class at Harper 8. Buying a house 9. Friday night poker game Are these contracts?
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1. Offer & Acceptance – mutual assent A. Offer Definite offer or proposal Person placing the offer (the offeror) intended to be bound by it
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B. Acceptance : ▪ Reasonable communication ▪ Cannot accept with silence ▪ Must come from the person to whom the offer was made (the offeree) ▪ Acceptance of material
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2. Competent Parties May not be competent: ▪ Minor, there are exceptions! ▪ Not valid on necessities ▪ Cannot be voided after 18 years old ▪ Business owners are not considered minors ▪ Intoxicated ▪ Mentally impaired
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3. Legal purpose No contracts for stolen/illegal goods What if you didn’t know?? 4. Consideration Exchange of services: every contract must have consideration ▪ Benefit and detriment (gain or loss) ▪ What about Promises: are they enforceable? ▪ NO – no mutual gain/loss
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5. Proper Legal Form Assumed Oral Written ▪ Over $500 ▪ Real Estate ▪ Debt ▪ More than one year to complete ▪ Marriage
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1. Eating at a restaurant YES 2. Hiring the 13 year old next door to baby-sit YES (for the adult only – voidable for the 13 year old) 3. Asking a girl to the prom YES??? (If both are 18) 4. Getting married YES 5. A wager on a football game with your friend NO 6. Turning the heat on in your house YES 7. Taking a class at Harper YES 8. Buying a house YES 9. Friday night poker game NO Are these contracts?
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They are only an intent to sell, not a legal offer!
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Age 18 Day before birthday Age of majority binds prior contract Marriage terminates minority status Emancipated minor
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DEFECTIVE AGREEMENTS Not Enforceable! Misrepresentation (Fraud) Selling something under false pretenses intent to commit fraud Undue Influence Conniving relative Concealment of vital facts House was flooded at one time Threat or force Sign this contract or else……
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1. Unilateral: (one-sided) CONTRACT IS VALID 2. Mutual Mistake: ( both parties made an error) CONTRACT IS VOIDABLE!
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The consumer is protected by Federal law which provides uniform protection across state borders RULES REGARDING CONTRACTS ARE THE SAME STATE TO STATE! Why???
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Must be 18 years of age or older Dollar amount varies from state to state You do not need a lawyer!
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