1. Lesson 7-1
Quiz Review

2. Who are the 2 parties involved in a contract offer and acceptance?
Offeror: Person who “makes” the offer
Offeree: Person who “Accepts” the offer
Counteroffer: When the original offer is changed by either party (Ends the offer)

3. What are the 3 elements of an offer
The offer made was serious and legal
The terms of the offer were definite and complete
The offer was communicated to the offeree

4. How many parts are there in a valid contract?6
Offer and Acceptance, Genuine Assent, Consideration, Capacity, Legality and Writing

5. How is offer and acceptance defined?
Both parties accept the agreement on “Mutually acceptable terms”
All 3 elements of a proper offer are verified as well as all 3 elements of acceptance
First step in creating a contract

6. How is Genuine Assent defined?
Agreed terms based on not being forced (Duress), misled (Misrepresentation/Fraud) or a mistake
Key is you entered a contract under your own free will and decided based on correct facts

7. How is Consideration defined?
Both sides to an agreement “Gain” something fair
Fairness means they got what they expected
Value of the trade is based on what the parties determine is fair before agreement

8. How is Capacity defined?
Ability to enter a contract by understanding your own actions
You can make decisions on your own
Protects minors, mentally incapacitated people

9. How is Legality defined?
The contract is legal
Anything within a contract that is illegal can void the contract even if the rest is legal
Illegal contracts are void

10. How is Writing defined?
Some contracts must be written to be considered valid
Most contracts are not written and are valid (Cash register)

11. Preliminary Negotiations vs. offer
Preliminary Negotiations are not offers, but rather attempts to induce someone into a contract
They are not specific many times and usually do not have the intent needed to make an agreement

12. Social agreements
Social agreements are things like dating or going out with your friends
Not contracts because no exchange of value

13. Essential information in terms
Essential information is all the details needed to make an agreement clear
Names of parties, price, pay method, details of goods, and signature (If in writing)

14. Essential information in terms
Essential information is all the details needed to make an agreement clear
Names of parties, price, pay method, details of goods, and signature (If in writing)