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Department
Management
Course
MGM102H5
Professor
Nicole Myers
Semester
Winter

Description
Part 3: The Law of Contract Chapter 7: An Introduction to the Legal Relationship Introduction Contract- an agreement made between two or more persons that is enforceable at law Freedom of contract- the general ability of the parties to create specific rights and duties Historical Development of the Law of Contracts  Merchant law  Ecclesiastic law  Manor courts th  17 century development of the bargain theory of contract The Elements of a Valid Contract 1. An intention to create a legal relationship 2. Offer 3. Acceptance 4. Consideration 5. Capacity to contract 6. Legality Intention to be bound: The assumption at law that strangers intend to be bound by their promises Certain types of contracts must be in writing ***All contracts must meet the 6 required elements of a valid contract in order for the contract to be enforceable by the Courts*** Contracts must also be free from any vitiating elements including:  Mistake  Misrepresentation  Undue influence  Duress Intention to create a Legal Relationship  Meeting of the minds (consensual agreement) Consensus ad idem: Agreement as to the subject or object of the contract  Essential element is a promise o Party intended to be bound by promise made  Intention is a presumption at law Presumptions in Contract Law  Strangers intend to be bound by their promises  Family members and close friends do not intend to be bound in contracts  Both are presumptions that can be rebutted Invitation to do Business  Advertisements are not offers  Invite offers that seller may accept or reject Offer and Acceptance The Nature of an Offer Offer: A tentative promise subject to a condition Communication of an Offer  A offer must be communicated by the offeror to the offeree before acceptance may take place  Offer is not valid until it is received by the offeree, and the offeror is not bound by the offer until such time as it is accepted  Cannot accept an offer you do not know of  Crossed-offers—in the mail do not constitute a contract  Only the person to whom the offer is made may accept the offer Acceptance of an Offer Acceptance: A statement or act given in response to and in accordance with an offer Acceptance—Specific Rules  Offeror is master of their offer and can dictate form of acceptance  If acceptance is to be by oral means then complete by either phone or directly speaking to offeror Acceptance—Postage Rules  Acceptance must be communicated in the manner requested or implied by the offeror in the offer  The acceptance of the offer takes place when the letter of acceptance, properly addressed and the postage paid, is placed in the postboxes or post office  If the acceptance lost while in the hands of the post office, the contract would still be binding  The acceptance would not be complete until the offeror was made aware of the acceptance Acceptance—Other modes of acceptance  Acceptance not complete until offeror made aware of acceptance o Until it reaches offeror o Acceptance complete when and where received Acceptance—Electronic Offer and Acceptanc
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