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LAW 122 (625)
Chapter 7

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Law and Business
LAW 122
Avi Weisman

Chapter 7 The Nature and Creation on Contractsy Contract is an agreement that creates rights and obligations that can be enforced in law y Meeting of the Minds is a mutual agreement to enter into a legal transaction on a particular basis y Exchange of value occurs when parties each give up something y Every contract requires a number of distinct steps 1 The parties must have the intention to create legal relations 2 they must reach a mutual agreement through the process of offer and acceptance 3 they must enter into a bargain by each giving considerationIntention to Create Legal Relationsy Intention to create legal relations arises if a reasonable person would believe that they parties intended to create a legally enforceable agreement y test is objective rather and subjective y Two reasons for that rule o a test of subjective intentions would be difficult to apply because a Person could easily lie at trial o an important goal of the law of contracts is to protect reasonable expectations y a reasonable person simply ignores unrealistic and exaggerated proposalsOffer THE NATURE OF AN OFFER y Parties must also enter a mutual agreement through the process of offer and acceptance y Offer is an indication of a willingness to enter into a contract on certain terms y Offeror party who is offering to enter into a contract y Offeree party who is entitled to accept or reject an offer to enter into a contractINVITATION TO TREAT y Invitation to treat is an indication of a willingness to receive an offer y Distinction between an offer and an invitation to treat depends on an objective test y Ex Display of item on shop floor or price tags are invitation to treatCOMMUNICATION OF AN OFFER y requirement of communicationo offer must be communicatedo ie offer contained in undelivered letter ineffectivey offer must be communicated as offero ie offer received as typing assignment ineffective y communication may take many forms o written documentie written offer for car o oral statementie ordering food at restaurant o conduct ie sit in barber chair fill up tank with gasLIFE OF AN OFFER y Offer does not last forever it may cease to exist in a variety of ways A Revocation
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