Ch.5 Contracts - Bus 393

what does intention mean?

all parties know the rights and promises within the contract + they can sue or be sued

what does offer and acceptance mean?

• when one party offers something and the other accepts it unconditionally

• meeting of minds

• bribing is a form of negating the top condition

lapse

expiration of the offer

revocation

revoking your offer before acceptance

option agreement

• an exception to revocation

• this gives one party the option to keep the offer on the table for a period of while they get something in return; if the party that is given the option does not want to go ahead with it, they can let the option expire

what are some ways that are considered the proper communication of the contract

• party accepts the offer in the same way that is requested

• can be communicated by action alone, without verbal or written confirmation

• acceptance of mail: when the offer is put in the mil

• acceptance of email: when the offer is received by the systemand enters the information system

consideration

price that parties are willing to pay in order to gain the benefits from the contract

what are some exceptions to considerations

• you agree to accept a lower price to settle a debt

• if it is made under a seal

what is a seal

special stamp put on contracts with a one-sided agreement —» indicates the seriousness of the agreement + intention to be legally bound by the promise

legality

cannot be doing anything illegal

what are some breach of contract thingys

• product fails to meet the quality/description that was noted in the contract

• product is not delivered

• product is delivered after delivery date

• project remains incomplete after deadline

• no payment was made

unintentional breach

fulfillment of the contract depends on the successful completion of another

what must the non-breaching party do if the contract is breached

• the non breachers do not need to complete their contract obligations if the breach was major and heavily impacted the contract

• the non breachers must carry on with the contract is the breach was minor and related to a small contractual term/warranty

true or false: breach of warranty does end contractual obligations

false —» breach of warranty does not end contractual obligations, breach of contract does

how to determine damages?

the court-issued damages are meant to put the non breachers back to where they were before the contract

what is the correct way to measure damages

notion that the damages must be least profitable to plaintiff & least burdensome to defendant

unenforceable agreements

these elements must exist to relieve a party from its obligations:

• defensively: party may raise an objection to enforceability if it is sued

• assertively: regardless of whether a breach has occurred, the party can ask to have it unenforceable & if they make a convincing claim, then they can be relieved

misrepresentation of material fact

• when one party persuades another party into a contract by a false statement of fact, not opinion

• the contract can be rescinded by the deceived if the deceiving was unintentional

• if the misrepresentation was negligent, the deceived is entitled to monetary damages + order of rescission

economic duress

people are pressured into the contract due to serious economic harm

undue influence

when one party’s ability to excerise free will is restricted by the other party —» this is often a relationship bound situation therefore there is a power imbalance

unconscionable agreement

terms are unreasonably one-sided so the court won’t allow it to be enforced; this usually involves a vulnerable party

minors

dealing with minors is difficult; parents will not be held responsible unless they are signed on as guarantors

capacity

those under the influence or suffering from mental illness can claim they lacked the capacity to be in the contact

what should one do in a breach of contract

• ignore it

  • if it is minor

• negotiate compromise to bring a balance between you & the other party

• seek ADR

• litigate differences in court

in what conditions would the offer end

• if it is specifed in the offer

• death or insanity

• revocation: must communicate it to be effective

• rejection of the offer presented

• counter offer —» the initial offer would be cancelled

• option agreement