MOS 2275 Biz Law Chapter 6 Notes.docx.docx

5 Pages
72 Views

Department
Management and Organizational Studies
Course Code
Management and Organizational Studies 2275A/B
Professor
Cristin Keller

This preview shows pages 1 and half of page 2. Sign up to view the full 5 pages of the document.
Description
Chapter 6 Formation of Contracts Terminology: Bilateral contract: a contract in which there is an exchange of promises: both parties assume an obligation Contract: a voluntary exchange of promises creating obligations which, if defaulted on, can be enforced and remedied in the courts Consensus: factor in validity of a contract: both parties must objectively know and agree to its term Consideration: the price one is willing to pay for the promise set out in the offer Capacity: the freedom to enter into a contract, which is sometimes limited by law, as is the case, for example, with minors, the insane, the intoxicated, aliens, bankrupts, and Indians. Counteroffer: a new offer, proposal of which rejects and terminates the offer available until then Express contract: contract in which the parties have expressly stated their agreement, either verbally or in writing Gratuitous promise: a one-sided agreement that the courts will not enforce Illegal contract: one that is void because it involves the performance of an unlawful act Intention: desire or aim; parties must objectively intend an agreement to be legally binding; must intend to assume the obligations of the agreement Implied contract: one that is void because it involves the performance of an unlawful act Interim agreement: binding contract that will subsequently be put into a more formal document Invitations to treat: invitation to engage in the bargaining process Insanity: when a person cannot understand the nature or consequences of his acts Legality: one of the elements of a valid contract; the object and consideration of the contract must be legal and not against public policy Offer: a tentative promise to do something if another party consents to do what the first party requests Parol contracts: a simple contract that may be verbal or written but is not under seal Postbox rule: principle that mailed acceptance is effective when and where it is dropped into a mailbox Promissory estoppel: principle that when a gratuitous promise to do something in the future causes a person to incur an expense, the promisor may be held liable for those expenses if she fails to live up to the promise’ also known as equitable estoppel Quasi-contracts: contractual relationship involving a request for goods and services where there is no agreement on price before the serviced is performed; courts impose obligation to pay a reasonable price; also known as quantum meruit Quantum meruit: “as much as is deserved”; reasonable price paid for requested services; sometimes called a quasi-contract Revocation: withdrawal of an offer before acceptance (must be communicated to the offeree) Standard form contracts: contract with fixed terms prepared by a business Subject-to clauses: term making a contract conditional on future events Unenforceable contract: an otherwise binding contract that the courts will not enforce, such as a contract that does not satisfy the Statue of Frauds Unilateral contract: a contract formed when one party performs what has been requested by the other party; there is a promise followed by an act, but not an exchange of promises Valid contract: an agreement legally binding on both parties Void contract: an agreement that is not legally binding because an essential ingredient is missing Voidable contract: an agreement that has legal effect but that one of the parties has the option to end Summary Contracts - A contract is an exchange of promises enforceable in court - There are five essential elements of a contract: consensus, consideration, capacity, legality and intention Consensus - A contract requires a “meeting of the minds” - Offer- a tentative promise by the offeror contingent upon an acceptance by the offeree o All the essential terms of the contract must be contained in the offer o Non-essential terms will be implied by the courts o Invitations to treat are not offers o Offers must be communicated o The offer will end at a specified time, but it may be revoked earlier by notice to the offeree, unless an option agreement has been entered into o In the absence of a specified time limit, the offer will lapse after a reasonable time o A counteroffer, rejection, or the death or insanity of the offeror will also cause an offer to lapse - Acceptance- an indication of a willingness to be bound o Acceptance must be complete and unconditional o Acceptance must be communicated; effective when and where received o Postbox rule- an acceptance by mail (where reasonable) is effective when and where it is dropped in the mailbox Consideration - Consideration is the price paid for another party’s promise - Both parties must have experienced some benefit - Gratuitous promises are not enforceable - Consideration need not be fair - Consideration must be both specific and legal - Past consideration is no consideration - Agreement to accept less in full satisfaction of a debt may now be binding - Quantum meruit- when there is a request for services with no agreement as to the amount, a reasonable price must be paid - Promissory estoppel- a one-sided promise is generally not enforceable, but the promise may be used as a defence - When there is a seal, consideration is not necessary Chapter 7 Formation of
More Less
Unlock Document

Only pages 1 and half of page 2 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit