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LAW 122 (625)
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Chapter 7

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Law and Business
LAW 122
Stan Benda

Chapter 7The nature and creation of contractsContract is an agreement that creates rightsobligations that can be enforced in lawMeeting of the minds is a shared decision to enter into a legal transaction on a particular basis Exchange of value occurs when the parties each give up something Ex On pg 155Every contract needs aof distinct steps or elements 3 r important o The parties must have an intention to create legal relations o They must reach a mutual agreement through the process of offeracceptance o They must enter into a bargain by each giving consideration Comparing torts and contracts Intention to create legal relationsIntention to create legal relations arises if a reasonable person would believe that the parties intendedto create a legally enforceable agreemento To decide that issue a court asks whether a reasonable person would have believed that the parties intended to enter into a contract o Test is objective rather than subjectiveo Judge is concerned with what a reasonable person would have thought not what the parties themselves thought o There r 2 reasons for that rule First test of subjective personal intentions would be difficult to apply cuz a person could easily lie at trial Second the law of contracts goal is to protect reasonable expectations ex On pg 157 o Presence or absence of an intention to create legal relations is usually obvious ex On pg 157 OfferThe nature of an offerContract requires more than an intention to create legal relationsOffer is an indication of a willingness to enter into a contract on certain terms Offeror is a party who offers to enter into a contractOfferee is a party who receives an offer to enter into a contractOffer creates a risk cuz a contract comes into existence as soon as an offer is acceptedo Both parties in the offer become obligated to fulfill the promises contained in the agreement
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