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Lecture 3

LAW 122 Lecture Notes - Lecture 3: Objective Test


Department
Law and Business
Course Code
LAW 122
Professor
Eric Libman
Lecture
3

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Week Three Lecture Three
Contracts
Introduction
Contract is a legally enforceable agreement
Essential elements of a contract
Intention to create legal relations
meeting of the minds (offer and acceptance)
exchange of value (consideration)
Remember: Generally, doesn’t have to be in writing
1. Intention to Create Legal Relations
Parties must intend to create legal relations
Objective test: What would a reasonable person believe at time when contract was
formed?
General rule: There is a presumption…
of intent in commercial dealings
against intent in social and family context
Exception to rule: Presumptions are rebuttable
2. Meeting of the Minds
To prove meeting of the mind (=shared decision to enter into a legal transaction), you
must prove:
1. offer of terms
2. acceptance of terms
A. Offer
Offer = willingness to contract on stated terms
Offer must be communicated:
Written document
Oral statement
Conduct
Risk of contract creation through acceptance
B. Managing Risk: Invitation to Treat
Invitation to treat = willingness to receive offers:
person responding to invitation makes an offer
person making invitation may then accept the offer
Examples: shelf display; advertisements; catalogues
C. The Offer Still Exists
Offer turned into contract by acceptance
Offer may be terminated before acceptance:
revocation
lapse of time
rejection
counter offer
death or insanity
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