AFM231 Chapter Notes - Chapter 5: Bargaining Power
13 Sep 2015
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Document Summary
Contract: an agreement between two parties that is enforceable in a court of law. Elements of a contract: agreement: composed of an offer to enter into a contract and an acceptance of that offer. Genius of contract law: once contract created, both parties can rely on the terms they"ve negotiated and plan their business affairs accordingly. Rules governing contracts are based on common law judge-made laws. Judge resolving cf relies not on statute laws but what happened in similar cases. Contracts are legal cornerstone of any commercial operation. Contract law is facilitative allows participants to create their own rights and duties within the framework of rules. Legal factors in their business context: creating the contract. Contractual negotiations (automatically laden with legal meaning) Objective standard test: test based on how a reasonable person would view the matter: contract law is about what negotiators say and do, and not what they think or imagine (facts) Whoever"s better at bargaining gets favourable terms.
