LAW ch 5-12.docx

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Murray Horowitz

Chapter Five Making Enforceable Business AgreementsA contract is an agreement that is enforceable in a court of law A contract normally is an exchange of promises between 2 or more people that will be upheld in courtMust contain certain factorsoContractual capacitymust have the legal capability of entering into an agreementoLegality or lawful objectpurpose must be neither criminal nor against the public goodoConsensusthere must be complete agreement among the participantsoIntentionthe intent must be that legally enforceable obligations will result from the agreementoConsiderationprice paid for promise something of value promised or paid that is taken to indicate that the person has considered the agreement and consents to be bound to it rely on proof of the truthFreedom of contractpeople are permitted to vary and even reverse the legal principles that govern contracts by the terms of the specific contract being madeContacts should be drafted by a legal professionalCapacityPeople under age of majority are considered to lack full judgement in business affairs and therefore there are particular rules to safeguard their interestsMentally incompetent intoxicated individuals are also given specific protectionAge of majorityage at which a individual is considered a adult 19 BY 5NAppearance of the minor does not matterMinor is entitled to have money refunded but goods must be returnedParents of minors are not liable unless previously authorizedRepudiation anticipatory breachcancellation of a contract before it is fully performedMinors must honour contracts for necessitiesA minor only has to pay a reasonable price for necessitiesLoans to minors are not recoverable unless they are used for necessities Businesses should ask for proof of ageProtection is given to those individuals who suffer from mental impairment at the time of entering an agreement physical disease mental illness drug use alcoholMentally impaired must give proof of their incapacity individual was sufficiently impaired to not understand and must promptly end the agreement once in a capable mental stateundue delayLegalityIllegal contractscontracts which cannot be enforced because they are contrary to legislation or public policy break civil or criminal statues or are against public policy and violate public interestStatutory illegalityacts that are criminal or considered morally wrongNo contract can violate statuteContacts may still be enforced if there is no intention to violate the relevant statute Workers compensationcompensation to workers for injuries that resulted while on the jobIf contracts prohibit workers compensation courts will override as such a clause is illegalGambling is illegal unless it is government run or government licensedCourts will not enforce a contract if it is against public policygoes against common goodAgreements that restrict a persons ability to earn a living are called agreements in restraint of tradeslaveryNoncompetition clausea seller agrees not to enter a similar competing business with a certain distance for a certain timeEmployment agreementthe employer may seek restrictions on the employees right to compete in a similar business after leaving his present employment such as not being able to solicit customers of his present employers for six months after leavingWill be deemed unenforceable if individual is not able to earn a livingavoid welfareGoodwillthe value of the good name reputation and connection of a businessConsensusMust be general agreementStages
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