Business Law: Understanding Contracts and Offers, Summaries of Business Finance

Download Business Law: Understanding Contracts and Offers and more Summaries Business Finance in PDF only on Docsity!

lOMoARcPSD|

R. W. Emerson,

Business law

Business Law Ch 13: Contracts Contract : A legally enforceable promise, “a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty.” Elements required : Agreement ( offer and acceptance) consideration (by both), Contractual capacity (legal ability to enter binding agreement) legal object (can’t be illegal) Defences to contract : lack of genuine assent (fraud, duress, undue influence, misrep) lack of proper form requirements Objective theory of contracts : means we base the existence of a contract on the parties’ outward manifestations of intent and we base its interpretation on how a reasonable person would interpret it. Thus, the subjective intent of the parties is not usually relevant; what matters is how they represented their intent through their actions and words. Sources of Contract Law : The two most important sources of contract law are case law and the Uniform Commercial code (UCC). Classification of Contracts : Bilateral = Exchange of promises. Unilateral = Promise in return for an act Express contract: based on written or spoken words Implied Contract: based on conduct or actions Quasi Contract (implied in law contract): Not actually contracts but imposed in certain cases to avoid unjust enrichment Valid contract: all elements of contract formation satisfied Void Contract: Illegal object or serious defect Voidable: Parties can withdraw from or enforce contract Unenforceable: court prohibits contract from being enforced Executed contract: all terms of contract are fully performed Executory Contract: Some duties under contract not performed by one/ both parties Formal contract: Have special form or created in specific manner (contracts under seal, letters of credit, recognizances, negotiable instruments) Informal contract: No formalities required in making; a simple contract Interpretation of Contracts : plain-meaning rule, which states that if a writing, or a term in question, appears to be plain and unambiguous on its face, we must determine

bilateral contract : what the offeror wants is not performance but, rather, a return promise.

• Silence, generally can not be used to form a contract. Mirror image rule :the terms of the acceptance must mirror the terms of the offer. If they do not, no contract is formed. Instead, the attempted acceptance is a counteroffer. Mailbox Rule : an acceptance is valid when the offeree places it in the mailbox, whereas a revocation is effective only when the offeree receives it. The mailbox rule is not applicable when there is instantaneous communication, such as over the phone, in person, or by telex.
  • if the offer merely authorizes certain modes of acceptance but does not condition acceptance on the use of those modes, use of an unauthorized means of acceptance is acceptable but the contract is not formed until the acceptance is received by the offeror