SMGT 3861 Lecture Notes - Lecture 5: Contract, Option Contract, Undue Influence

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6 Mar 2019
Chapter 5: Contract Law
Tuesday, March 5, 2019
7:04 PM
A contract is:
o A promise, or set of promises
o For breach of which the law gives a remedy, or the performance of
which the law in some way recognizes a duty
One party promises to do something in exchange for something that the
other party promises to do
Types of Contracts
Bilateral contract: a contract consisting of the two promises (offer and
acceptance) and both parties are bound to perform conditional
Unilateral contract: only one party makes a promise. The other party makes
no promise but instead performs some act in exchange for the first party's
promise (e.g., insurance contract)
Option contract: involves an offer by one party to keep an offer open
exclusively to a second party for a period of time "time element to accept"
Conditional promise
Offeror and offeree
Creates power of acceptance in the offeree
May provide the way that another party can accept the offer
Includes details: parties, subject matters, the way to perform, and the
Contract can only be created if another party accepts the offer
Acceptance by the offeree or agent (not third party)
Must be in positive manner through words or conduct
o Not changing terms
o Recall counter-offer
Acceptance must be communicated to the offeror
o Not silence
o Bilateral contracts (promise for a promise)
Mail and email as acceptance
o Mail: acceptance is mailed
o Email: acceptance is received
Power of Acceptance is Terminated When:
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