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Contract Law Ch 5.docx


Department
Management and Organizational Studies
Course Code
MOS 2275A/B
Professor
Frederick King

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Intro to Contract Law 10/1/2012 11:48:00 AM
Chapter 5
Contract Law
Contract a deliberate and complete agreement between two or
more competent persons supported by mutual consideration
o Not necessarily in writing
o To do some act voluntarily
o Enforceable in a court of law
An agreement composed of an offer to enter into a contract and
acceptance of that offer
Complete the offer must be complete, certain
Deliberate the agreement must be deliberate, both parties must
want to enter into a contractual relationship
Voluntary agreement must be freely chosen
Between two or more competent persons must be at least two
parties in a contract that have legal capacity
Supported by mutual consideration involves a bargain or
exchange between the parties, each party must give something of
value in order to receive something of value
Not necessarily in writing oral contracts are enforceable, though
written is preferable
Creating the Contract
Contracts are first started with communication to enter an
agreement
Contract law is governed by the objective standard test and is
constructed on the basic assumption that those who negotiate and
enter into contracts have equal bargaining power:
o Objective standard test asks whether a reasonable person
would conclude that an offer and acceptance had occurred
o Equal bargaining power they are able to look out for
themselves and will work to maximize their own self interest
Contract law is narrow in scope more often concerns specific sales
rather than long term business relationships
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