Management and Organizational Studies 2275A/B Chapter 5: Chapter 5.docx

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2275A/B
• Professor: Prof

Document Summary

Contract: pact between two parties that is enforceable in a court of law. Not necessarily in writing: oral contracts are enforceable. Agreement: composed of an offer to enter into a contract and an acceptance of that offer. Deliberate: both parties must want to enter into a contractual relationship, intention to create legal relations. Voluntary: agreement must be freely chosen and not involve serious forms of unfairness. Between two or more people: must have legal capacity. Supported by mutual consideration: bargain or exchange between the parties. Contract law ensures each party gets what they bargained for. What people say not what they imagine. Objective standards test: based on how a reasonable person would view the matter. Would a reasonable person see that an offer and acceptance has occurred. Negotiating parties rarely have equal bargaining power. One side will probably have more experience, knowledge etc. Those who enter into contracts are thought to have equal bargaining power.