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Lecture

Contract Law

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Department
Business
Course
BU231
Professor
Shelley Mc Gill
Semester
Fall

Description
BU231: Contract Contract ◦ Like option law o Its voluntary ◦ When you create a contract you elevate an ordinary promise that you might make everyday o By using contract law you can make this a legally enforced set of promises ◦ “legally enforceable set of promises” ◦ If you are not living up to the contract you can be sued and be forced to pay damages ◦ There are moral and ethical obligations of a contract as well o They don’t make a distinction between promises (usually) What is a Contract ◦ Voluntary set of rules that parties promise to follow o Both sides make promises  Usually one side is providing money  Example • Lease o Often the formation of the contract and the act carried out are months apart ◦ If they don’t follow them they may be forced to follow them by the courts ◦ “Breach of Contract” is the cause of action that is used to force someone to live up to their promises or pay the price o Most general cause of action Elements of the Breach of Contract Cause of Action ◦ There is a contract o Is the contract formation o What did we believe at the time we made the deal ◦ The contract contains a term or clause that requires the other party to fulfill (perform) an obligation o Have to prove that what the person did not do was something that was outlined in the contract that they are legally required to do  This is outlined in the terms of the contract or numbered clauses ◦ Other party did not do what was required by contract so compensation is owing o They have to pay for whatever it would take to fix the deficiency that they did not take in order to get that person to do it again in the right manner  This is known as specific performance • Not usually done, people seem to think that it sounds like slavery • Will be done for things such as o Land deals  Since they are one of a kind o Specific clothing pieces  They are one of a kind things Breach of Contract Analysis (shown in textbook) 1. Is there a Contract? o Forming a contract Chapter 5 and 6 o Backing out of a contract Chapter 7,8,9  When should this be applicable 2. What does the contract require or mean? o What do the words mean Chapter 10 o Who must abide by the terms Chapter 11 3. Did I get what I bargained for? o Was the contract performed, breached or discharged chapter 12 o What remedy am I entitled on Chapter 13 o Is there a Contract? Formation ◦ Required elements of a contract: o Offer  All of the stuff is in the offer • The promises that we are making to you , and the promises that you are making to us  The person making the offer is the one that is in charge • They are the one choosing the terms o Terms can also be reached through negotiation o Acceptance  Just the action of accepting the offer  Can be done orally, in written context or by clicking a mouse o Consideration  Thing that separates the legal promise from the ethical promise  A legally enforceable contract has a part of its foundation that both parties get some value  The value I get for the value I give o Intention  Attitude/belief that both parties understand that they are creating a legal relationship Offer and Acceptance ◦ The offer is the source of the terms of the contract ◦ It can be written or oral or by conduct ◦ Offer must be capable of acceptance i.e. not an invitation to treat, advertisement or puffing ◦ It must contain enough particulars to form the basis of a contract ◦ Acceptance must be unqualified and communicated to the offeror o Example: Grocery Store  The offer comes when you present your products to the clerk (doesn’t have to be verbal)  The clerk accepts your offer when they ring up your purchase  You perform the task when you have handed over your money and given it to the clerk ◦ Offer may put a time limit on acceptance o The offer automatically expires at a certain point ◦ If it expires it is said to “lapse” ◦ Otherwise you can revoke your offer prior to receiving accepta
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