1. Law of Contracts

2. WHAT MUST BE IN A CONTRACT?
Offer and acceptance
Genuine assent
Legality
Consideration
Capacity
Writing

3. Offeror - Offeree Offeror – is the person who makes an offer.
Offeree – is the person to whom the offer is made to.

4. REQUIREMENTS OF AN OFFER
Contractual intent must be present
Jests
Statements made in anger or terror
Preliminary negotiations
Social agreements
Offer must be communicated to the offeree
Essential terms must be complete and definite

5. HOW CAN OFFERS BE ENDED? Revocation by the offeror
Time stated in the offer
Reasonable length of time
Rejection by the offeree
Counteroffer
Death or insanity of either the offeror or offeree
Destruction of the specific subject matter

6. HOW CAN AN OFFER BE KEPT OPEN?
Options - (money)
Firm offers

7. WHAT IS REQUIRED OF AN ACCEPTANCE?
Only offerees may accept
The acceptance must match the offer
Acceptance must be communicated to the offeror
Silence, bilateral, unilateral acceptance
Modes of contractual communication
When acceptances are effective

8. GENUINE ASSENT AND DURESS
Threats of illegal conduct
Threats to report crimes
Threats to sue
Economic threats

9. UNDUE INFLUENCE AND ASSENT
The relationship
Unfair persuasion

10. WHAT ARE THE TYPES OF CONTRACTUAL MISTAKES?
Unilateral mistakes
Mutual mistakes

11. WHAT IS MISREPRESENTATION?
Untrue statement of fact
Active concealment
Silence
Materiality
Reasonable reliance

12. FRAUD The misrepresentation must be intentional or reckless
The misrepresentation or concealment must injure

13. REMEDIES FOR FRAUD
Rescission
Damages
Punitive damages

14. FOCUS
Scenario
Jane contracts with Mike to purchase one of his two skateboards. Jane thinks she has bought the red one, a premier skateboard. Mike thinks Jane has bought the blue one, his less valuable skateboard.
Question
Does a contract exist?

15. FOCUS
Scenario
The Thompsons were told that if they did not sign a contract to repay a $2,000 loan at 40 percent interest, their son would be in danger of physical harm. Afraid that their son would be hurt, the Thompsons signed the contract.
Questions
Is the contract enforceable?
Why or why not?

16. CONSIDERATION Act, forbearance, or promise Trading Legal value
Adequacy of consideration
Nominal consideration

17. CIRCUMSTANTIAL CONSIDERATION
Illusory promises
Termination clauses

18. CIRCUMSTANTIAL CONSIDERATION
(continued)
Existing duty
Existing public duty
Existing private duty
Settlement of liquidated debts
Settlement of unliquidated debts
Release
Composition of creditors

19. FOCUS
Scenario
Prof. Feer tells his students: “You have worked hard, and if you continue to perform at this high level, I'll pay for a pizza party at the end of the year—if I think it is warranted.” The students continue to work hard, and class grades are high, but no party is given.
Question
Can the students enforce the promise?

20. FALSE CONSIDERATION
Mutual gifts
Past performance

21. EXCEPTIONS TO THE REQUIREMENT OF CONSIDERATION
Promises to charitable organizations
Promises covered by the UCC
Firm offers
Modifications
Promises barred from collection by statute
Statute of limitations
Debts discharged in bankruptcy
Promissory estoppel

22. WHAT IS CAPACITY? Protections for those who lack capacity Minors
Those mentally incapacitated
The intoxicated

23. WHO HAS CONTRACTUAL CAPACITY IN ORGANIZATIONS?
Scope of authority
Employer grants authority to employee
Assumption of authority based on job title

24. WHEN CAN DISAFFIRMANCE OCCUR?
Any time while still under the incapacity
Within a reasonable time after attaining capacity

25. WHAT MUST BE DONE UPON DISAFFIRMANCE?
Loss of value
Obligations of party with capacity

26. DISAFFIRMANCE TIMELINE

27. CONTRACTS THAT CANNOT BE DISAFFIRMED
Court-approved contracts
Major commitments
Banking contracts
Insurance contracts
Work-related contracts
Sale of realty
Apartment rental

28. CONTRACTUAL EFFECT OF MISREPRESENTING AGE
Other party to the contract may collect damages
Minor still may be able to disaffirm contract