Business Law - Chapter 7
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What are the sources of contract law
common law governs all contracts except when it has been modified or replaced by statutory law such as the UCC or by administrative agency regulations
What are the functions of contracts (contract law)
What kind of promises will be legally binding and supplies procedures for enforcing legally binding promises ,or agreements
An agreement that can be enforced in court
How are contracts formed
two or more parties who agree to perform or to refrain from performing some at now or in the future
What is the objective theory of contract
intent is determined by objective facts, not by the personal or subjective intent, or belief, of a party.
What are the four requirements for a contract to be valid
- contract capacity
What makes a contract unenforceable if it meets the four requirements to be valid?
lacks voluntary consent or is not in the required form
What are the different types of contracts
- Bilateral: a promise for a promise
- unilateral: a promise for an act
- formal: requires a special form for contract formation
- informal: requires no special form for contract formation
- express: formed by words
- implied: formed at least in part by the conduct of the parties
- executed: a fully performed contract
- executory: a contract not yet fully performed
- valid: a contract that has the four necessary contractual elements of agreement, consideration, capacity, and legality
- voidable: a contract in which a party has the option of avoiding or enforcing the contractual obligation
- Unenforceable: a valid contract that cannot be enforced because of a legal defense
- void: no contract exists, or there is a contract without legal obligations
- Quasi Contract: no contract exists, but a court imposes a contract on the parties to prevent unjust enrichment
What are requirements of an offer (contract law)
- Intent: there must be a serious, objective intention by the offeror to become bound by the offer
- Definiteness: the term of the offer must be sufficiently definite to be ascertainable by the parties or by a court
- Communication: the offer must be communicated to the offeree
How can an offer for a contract be terminated through actions of the parties?
- revocation: Unless the offer is irrevocable, it can be revoked at any time before acceptance without liability.
- Rejection: Accomplished by words or actions that demonstrate a clear intent not to accept the offer
- Counter offer: A rejection of the original offer and the making of a new offer
How can an offer for a contract be terminated through operation of the law
- Lapse of time
- Destruction of the specific subject matter of the offer
- Death or incompetence of the offeror or offeree
What are the requirements to accept a contract, a unilateral contract, or a bilateral contract
- Made only by the offeree or the agent
- Must be unequivocal: (mirror image), no new terms or conditions can be added to the acceptance or else it will be considered a counter offer
- Acceptance of a unilateral offer is effective on full performance of the request
- an offeree's silence does not constitute an acceptance
- acceptance of a bilateral offer can be communicated by the offereeby any authorized mode of communication and is effective on dispatch
What are the requirements of an online offer
- terms of an online contract should be as inclusive as the terms in an offer made in a written document.
- displayed in an easy readable format and should include a click-on agreement
define click-on agreement (online contract)
an agreement created when a buyer, completing a transaction on a computer, is required to indicate her or his assent to be bound by the terms of an offer by clicking on a box that says i agree or i accept
Define shrink-wrap agreement (online contract)
an agreement whose terms are expressed inside a box in which goods are packaged. By keeping the goods, he or she agrees to the terms of the shrink-wrap agreement.
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