CHAPTER 5. CONTRACT Requires a which is called

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1 CHAPTER 5 HOW S ARISE NBEA STANDARD II: Analyze the relationships between contract law, law of sales, and consumer law. OBJECTIVE: Develop an understanding of contracts: distinguish between express and implied contracts, unilateral and bilateral contracts, and oral and written contracts. Distinguish between a valid, void, viodable and unenforceable contract. Requires a which is called MANIFESTATION OF,,. MUTUAL ASSENT WHAT IS IN A? (1) A contract is an agreement which consists of CONTENT and. OFFER Defined as a by to another to create a. ACCEPTANCE Defined as to go along with ( ). (2) Did everyone give up something? CONSIDERATION Whatever is for something else. To review elements of a contract: Agreement which consists of and Consideration which is whatever is for something else. You have a right to freely enter a contract as long as it is. CAPACITY DEFINED:. Capacity has to do with being Did you when you entered into the contract? INFANCY Under the age of, can an agreement if not for. WHY UNDER 18?. NECESSITIES OF,,, LIFE 1

2 MENTAL INCAPACITY EXPRESS CONTRCT ORAL TWO TESTS: 1) TEST *still used today Did you the nature and consequences of the transaction a the time it was entered into? (2) TEST Because of the, a person was unable to act in a manner with respect to the transaction. Ortetiere vs. New York State Retirement System $300/month $400/month survivorship vs. no survivorship TYPES OF S, Two types 1.. WRITTEN 2.Contract in writing is called contract. What is the general rule of contracts? Two reasons for getting it in writing: a. b.. ENFORCEMENT OF S: ORAL: years after being made. WRITTEN: years after being made. IMPLIED Results from. Look at the ; Can result without. What are the facts you look at? QUASI There would be a contract except for. Determined by two things: and VALID SIX ELEMENTS OF GOOD Defined as: contract

3 VOID VOIDABLE BILATERAL UNILATERAL EXECUTED EXECUTORY S COMMON LAW S PROMISSORY ESTOPPEL OFFER OFFEROR A contract that. Missing of the elements of a good (valid) contract would render a contract. A contract voided. Voidable contract can be or. Example: contract between minor and adults will void contract for but not. Why void for minor?. How many promises involved?. One person promises to do something and the other person. contracts. Completed when parties complete their part of the bargain. contracts. One party completed their part but other party has competed their part of the bargain. All contracts but not all agreements are. trends of contracts. ex: you make plans to take someone out and they renege at last moment, can you sue them? Modern trend contract called. ex: someone makes an agreement with you that you accept in and it causes you, you sue for damages. Proposal by to enter a contract.. OFFEREE. 3

4 BASIC OFFER REQUIREMENTS 1. Offer made to you must be and. ex: Newspaper ad: to make offer Catalogs, price lists, circular: Price is good for certain period indicated --can company. 2. Offer must be to. Can a third party accept the offer if offer not made to them? 3. Offer must be made and intent to be. Offers done in or under are not considered real offers. MAILBOX RULE When offer mailed, faxed, or phoned by offeror, acceptance takes place when,, or by. General rule: Any manner of acceptance constitutes acceptance and contract EX: If offer made by mail, offeree accepts and mails--take effect. Why? If offer made by mail, offeree accepts by fax--takes effect. Why? If withdrawing an offer, withdrawal does not take affect until. 4

5 Exception to mailbox rule: If told to respond by certain method ex (mail) and you respond another way (phone); offer not effective until. ex: offeree receives offer by mail, responds by fax acceptance when? ex: if offeree told to respond by mail and faxes, acceptance when? If offer good for 10 days from date of letter, offer is not good if sent after 10th day no matter when received offer. If offer good for 10 days with no reference to date of letter, offer is good from date you received the offer for 10 days If states: good for 10 days and you receive on April 10. Good until what date?. WHY? If states: good for 10 days from date of letter and letter dated April 3 Good UNTIL what date?. WHY? How long is an offer good? PARTS TO AGREEMENT ACCEPTANCE 1 ST PART: 2 ND PART: + = Unqualified willingness to go along with an offer is. REQUIREMENTS FOR ACCEPTANCE UNCONDITIONAL ACCEPTANCE. EX: Just give me a yes or no answer MIRROR IMAGE mirrors. RULE Any change in of means the has not accepted the offer but made a. COUNTER OFFER DEFINED:. 5

6 EX: Offer my house for $30,000. Offeree says I will buy your house but would like to offer $25,000 If counteroffer made by offeree, who is now the offeror? If counteroffer made by offeree, who can now accept/reject offer? MIRROR IMAGE RULE: must equal. If is made - it ends the first offer. EXCEPTIONS TO MIRROR IMAGE RULE: 1. can make minor changes as long as it does not change basic terms of the contract. FIRM OFFER 2.Good for months unless something is stated. OFFER AND ACCEPTANCE - OFFER TERMINATION One way offer ends is by of law. 5 WAYS OFFER 1. stated in the offer is most common way for offer to TERMINATED end--time frame. 2. No stated = time standard. 3. of subject matter. 4. or of party. If offer made and you accept, offeror dies or declared insane at time offer made, there is contract. If offer made and offeror dies/becomes insane offer accepted, must deal with of estate. SUPERVENING 5. Making an offer and it is to perform it ILLEGALITY KEY ELEMENT: Death or insanity ends an offer if offeror. HOW DO MOST OFFERS END? By actions of. REVOCATION OF OFFER of offer How long do you have to withdraw an offer?. IRREVOCABLE Someone to keep an offer open. OFFER Ex: I will give you $500 to hold this car until 6:00 tomorrow. FIRM OFFER Good for months if nothing stated. Ex: This is a firm offer until tomorrow at 6:00 6

7 REJECTION ends an offer immediately. Ex: Would you buy my stapler for $5. NO COUNTER- Ends offer. OFFER Ex: I will sell you my stapler for $5. I accept buy would you take $4. It is now up to the original to accept/reject new offer. INQUIRY As long as you don t say, original offer still on the table. Ex: I will sell you my stapler for $5. Would you be willing to take $4. No, price if $5. In 2003, several class actions were brought against bottled-water maker Poland Spring. Plaintiff's lawyers claimed the bottled water did not, in fact, come from a spring and was unsafe to drink. The class included some 10 million Poland Spring customers. When a Kane County (Ill.) judge signed off on a settlement, who fared best? A. Poland Spring B. Consumers C. The lawyers D. All of the above Answer: C. Poland Spring was vindicated because the judge found evidence against the company "weak." One plaintiff's attorney even admitted after he toured a Poland Spring facility that the water came from a spring and was safe. Consumers won $8 million in rebates and discounts off future purchases of Poland Spring water. But the lawyers scored the biggest take, collecting $1.35 million in fees. It is a very sobering feeling to be up in space and realize that one's safety factor was determined by the lowest bidder on a government contract Alan Shepherd 7