Chapter 3 Flashcards
(44 cards)
Contract
a written or oral promise exchanged for another promise or for a performance that the law will enforce
6 Essential Elements of a Contract
offer acceptance consideration intention capacity legality
Unilateral Contracts
promise for performance. the performance brings the contract into existence
Bilateral
promise for a promise. The exchange of promises brings the contract into existence)
Invitation to Treat
inviting another person to make an offer
Offer
a tentative promise
may be conditional
Lapse Offers
offeree fails to accept by deadline
offeree fails to accept w/in a reasonable time if there is no deadline
a party dies, or loses the capacity to contract
Option
A agreement by an offeror to leave an offer open for a specific time periods
Revocation of an Offer
can be revoked before it is accepted
has no legal consequence
Counter Offer
if an offere amends or changes the terms of the contract
Acceptance
2nd essential element of a contract
offeree accepts the fastest method. must be made in a timely fashion.
Consideration
the exchange of benefits
the price one party is willing to pay for the promise of another.
need not be fair, can be represented by a seal (bind w the absence of considerations)
Gratuitous promises
a promise w/ no consideration in return. typically have no remedy in law. typically don’t involve a contract
Seals
Binding (for contracts) even when there are no considerations
Unconscionable Transactions
When a Judge feels the considerations are UNFAIR b/c of:
lopsided bargaining power
abuse of power
breach of fiduciary duty
Intention (to create a legal relationship)
OBVIOUS
each party must intent to create a contract.
language may be used to express intent
intent can be inferred.
Capacity
Both of the parties must have the capacity to enter into the contract.
If one of the parties lack the capacity to enter into the contract the contract maybe VOID/VOIDABLE
Repudiate
deny the application of a contract of deal
Factors to consider w/ capacity (list)
Mental illness, substance intoxication, senility Minors Agents & Principles Power of Attorney Spouses/ Cohabitants Business Partners Corporations Native People Diplomatic Immunity Enemy Aliens Bankrupts
Mental Illness (Capacity)
If a person can prove that at the time of contract they were incapacitated they may REPUDIATE or choose to enforce the contract
Minors (Capacity)
Only enforceable when the contracts are beneficial to the minor.
contracts for employment
necessity of life such as legal/medical advice
Designed to protect minors.
Agents & Principles
Agents are authorized by principles to act on their behalf and enter into contractual agreements
think hockey players and agents
Power of Attorney (Capacity)
Special agreement, where by the donor in writing grants power to the attorney to act on his behalf.
Business Partners (Capacity)
partners can bind, and be bound by other partners.Unless the partners conduct is out of scope of the partners authority to the knowledge of the affected third party. Retired business partners may still be liable
