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Law 122 - Chapter 7 - My Notes.docx
Law 122 - Chapter 7 - My Notes.docx

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Ryerson University
Law and Business
LAW 122
Theresa Miedema

Chapter 7 The Nature and Creation of Contracts Contract – is an agreement that creates rights and obligations that can be enforced in law Meeting of the Minds – is a shared decision to enter into a legal traction on a particular basis Exchanged of Value – Occurs when the parties each give up something A contractual relationship can continue even after there has been an exchange of value Every contract requires: 1. The parties but have an intention to create legal relations a. Intention to create legal relations – arises if a reasonable person would believe that the parties intended to create a legally enforceable agreement i. A reasonable person simply ignores unrealistic and exaggerated proposals 2. They must reach a mutual agreement through the process of after and acceptance 3. They must enter into a bargain by each given consideration Offer – is an indication of a willingness to enter into a contract on certain terms Offeror – is a party who offers to enter into a contract Offeree – is a party who receives an offer to enter into a contract Invitation to Treat – is an indication of a willingness to receive an offer  A statement is not an offer unless it is communicated and received as an offer The Life of an Offer:  Revocation – occurs if the offeror withdraws an offer o Is not effective unless it is reasonably communicated to the offeree  Lapse of Time – An offeror is entitled to limit the lifespan of an offer, possibly by stating that acceptance must occur by a specific date. This is almost always true with an option  Death or Insanity  Rejection – occurs when the offeree refuses an offer  Counter Offer – occurs when an offeree responds to an offer by indicating a willingness to enter into a contract but on different terms Firm Offer – occurs when the offeror promises to hold an offer open for acceptance for a certain period  An offeror can revoke it at any time Option – is a contract in which the offeror is paid in exchange for a binding promise to hold an offer open for acceptance for a specific period  A firm offer cannot be revoked if the offeror’s promise was placed under seal or if the offeree paid for the right to accept within a certain period Tender – is an offer to undertake a project on particular terms 1. It constitutes an offer to enter into a special contract, called “Contact A”, to hold a fair tendering process in exchange for the submission of an irrevocable bid 2. It also constitutes an invitation to treat to receive offer to enter into a contract, called “Contract B”, for the construction of the library.  Contract A – one for each company that submits a tender to the city  Contract B – Between the city and the company that submits the winning tender Battle of the Forms – occurs when each party claims to have entered into a contract on the basis of it own standard form document Bilateral Contract – Occurs when a promise is exchanged for a promise  Many c
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