ECO320H1 Final: ECO320 Final

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The purpose of a contract is to secure performance that occurs later than the agreement. Bargain theory of contracts: a promise is legally enforceable if it is given as part of a bargain; otherwise, a promise is unenforceable. Bargaining is a dialogue on value to agree on a price. Three elements in the dialogue: offer, acceptance and consideration. Sometimes business practices and social conventions prescribe the signals for making and accepting offers (at an auction) Sometimes contract law and statutes specify procedures for offer and acceptance (for land) Promisor refers to the person who gives a promise and promisee refers to the person who receives a promise. In a bargain, the promisee induces the promisor to give the promise (the consideration) Each bargain involves reciprocal inducement: promisor gives promise as inducement to promisee. Promises secured by consideration are enforceable and promises lacking are unenforceable.