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VHS Study Guide Psychology WEEK 1: Psychology as a Science The goal of this week is to distinguish between "Pop Psychology" (myths) and "Empirical Science" (facts). 1. The Philosophical Roots & "Big Names" Wilhelm Wundt: Established the first psychology lab (1879). He used Structuralism, trying to map the "structure" of the mind through Introspection (having subjects report every tiny sensation they felt). Sigmund Freud: Founded Psychoanalysis. He believed behavior is driven by the Unconscious mind and childhood traumas. He used dream analysis and "free association." Behaviorism (Watson & Skinner): They rejected Freud. They argued psychology must be an Empirical Science, meaning we only study what we can see and measure. Watson: Famous for the "Little Albert" study (fear conditioning). Skinner: Focused on how rewards/punishments shape behavior (Operant Conditioning). Ivan Pavlov: A physiologist who discovered Classical Conditioning (associating a neutral stimulus, like a bell, with a natural reflex, like drooling). Maslow’s Hierarchy of Needs: A Humanist theory. It’s a pyramid starting with basic survival (food/water) and moving up to Self-actualization (reaching your full potential). 2. The "Brain Traps" (Critical Thinking & Myths) Word-of-Mouth: We believe things just because we’ve heard them a lot (e.g., "We only use 10% of our brain"—FALSE). Desire for Easy Answers: People prefer a "quick fix" (like a 5-minute cure for anxiety) over complex scientific reality. Selective Perception: We only notice things that confirm our existing beliefs. Post Hoc, Ergo Propter Hoc: "After this, therefore because of this." The logical error of assuming that because Event B followed Event A, Event A must have caused it. Inferring Causation from Correlation: The most common exam trap. Just because two variables move together (like heat and crime), it doesn't mean one causes the other. Reasoning by Representativeness: Stereotyping. Thinking a person "looks like" a certain role, so they must be that role (the "Finance Bro" vest example). WEEK 2: Scientific Inquiry and Research This is the "How-To" of psychology. You need to know the difference between just watching people and running a real experiment. 1. Research Methods Naturalistic Observation: Watching subjects in their natural habitat without interfering. High "real world" accuracy, but you have zero control. Case Study (Clinical): An intensive, detailed look at one unique individual (e.g., a person with a rare brain injury). Great for detail, but you can't apply the results to everyone. Archival Research: Looking at old records, newspapers, or medical files to find patterns. Longitudinal vs. Cross-Sectional: Longitudinal: Following the same group of people for 20+ years. (Expensive, but shows true change). Cross-Sectional: Comparing different ages at the same time (e.g., testing 10-year-olds and 50-year-olds today). 2. The Experimental Design (The "Gold Standard") Inductive vs. Deductive: Inductive: Starting with observations $\rightarrow$ forming a theory (Bottom-up). Deductive: Starting with a theory $\rightarrow$ testing it with an experiment (Top-down). Independent Variable (IV): The variable the researcher manipulates (The "Cause"). Dependent Variable (DV): The variable being measured (The "Effect"). Control vs. Experimental Group: The experimental group gets the "treatment"; the control group gets a placebo or nothing. Random Assignment: Every participant has an equal chance of being in either group. This prevents Bias. Single-Blind vs. Double-Blind: Single: Participants don't know which group they are in. Double: Neither the participants nor the researchers know. This prevents the researcher from accidentally giving "cues." WEEK 3: Biology and Behavior The "Hardware" section. How the physical brain creates the "Pink Slime" experience. 1. The Nervous System Map Central (CNS): Brain and Spinal Cord. Peripheral (PNS): Everything else. Somatic: Voluntary movements (walking). Autonomic: Involuntary (heartbeat). Sympathetic: "Fight or Flight" (Eyes dilate, heart speeds up, digestion stops). Parasympathetic: "Rest and Digest" (Calms the body down). 2. The Neuron (The Building Block) Dendrites: Receive messages. Soma (Cell Body): Process info. Axon: Sends the electrical signal. Myelin Sheath: Fatty tissue that speeds up the signal. Synapse: The tiny gap between neurons where chemicals travel. Neurotransmitters: Agonist: A chemical that mimics a neurotransmitter (enhances the effect). Antagonist: A chemical that blocks a neurotransmitter. 3. Brain Tools & Anatomy EEG: Measures electrical brain waves (good for sleep studies). MRI vs. fMRI: MRI shows structure (a picture); fMRI shows function (where blood is flowing). PET Scan: Uses radioactive "tracer" sugar to see which parts of the brain are active. The Endocrine System: Uses Hormones (slow-acting chemicals) released into the bloodstream by Glands (like the Adrenal or Pituitary). 4. The "Hidden" Biological Details (Week 3) Refractory Period: After a neuron fires, it needs a tiny "recharge" break before it can fire again. Think of it like a camera flash or a toilet flushing—you can't do it twice in a split second. Broca’s Area vs. Wernicke’s Area: * Broca’s: Controls Speech Production (Frontal Lobe). If damaged, you know what you want to say but can't get the words out. Wernicke’s: Controls Language Comprehension (Temporal Lobe). If damaged, you can speak, but it's "word salad"—it makes no sense. WEEK 4: Consciousness Consciousness is your awareness of yourself and your environment. It’s not an "on/off" switch; it’s a spectrum. 1. Processing Levels Conscious Processing: Tasks that require focused attention (e.g., learning a new TikTok dance or solving a math problem). Automatic Processing: Tasks we do "without thinking" once they are learned (e.g., walking or an experienced driver steering a car). 2. Altered States Hypnosis: A state of extreme self-suggestion where a person is highly open to direction. Meditation: A practice of focused attention to achieve mental clarity and emotional calm. Daydreaming: A shift in attention away from the current task toward internal thoughts and "mental movies." 3. Psychoactive Drugs (The "Drug Cabinet") Depressants (Alcohol, Barbiturates): Slow down the Central Nervous System (CNS). They decrease heart rate and reaction time. Stimulants (Caffeine, Nicotine, Cocaine, ADHD meds): Speed up the CNS. They increase heart rate and energy. Opiates (Heroin, Morphine, Vicodin): Specifically target pain receptors. They mimic Endorphins to stop pain and create euphoria. Hallucinogens (LSD, Marijuana, Psilocybin): Distort perceptions and evoke sensory images in the absence of sensory input. WEEK 5: Sleep and Dreams Sleep is a biological necessity, not a luxury. Your brain is incredibly active during this "downtime." 1. Stages of Sleep (The Cycle) Stage 1 (NREM-1): Light sleep. You might experience "hypnagogic sensations" (feeling like you are falling). Stage 2 (NREM-2): Deep relaxation. Characterized by Sleep Spindles (bursts of rapid brain activity). Stage 3 & 4 (NREM-3): Deepest sleep. This is when the body repairs itself. If you wake up here, you’ll feel very groggy. REM (Rapid Eye Movement): The "Dream Stage." Your brain waves look like you are awake, but your motor cortex is blocked—meaning your body is paralyzed so you don't act out your dreams. 2. Dream Theories (Why do we dream?) Freud’s Wish Fulfillment: Dreams are a "safety valve" for unacceptable feelings. Manifest Content: The actual storyline of the dream (e.g., being chased by a giant Pink Slime). Latent Content: The hidden psychological meaning (e.g., you are running away from your final exam stress). Activation-Synthesis: The brain's attempt to make sense of random neural static. The brain "synthesizes" a story from random "activation." Information Processing: Dreams help us sort out the day's events and consolidate memories. Threat Simulation Theory: Dreaming allows us to "practice" surviving dangerous situations in a safe environment. WEEK 6: Thinking and Processing This is about "Cognition"—how we use our "Pink Slime" to solve problems and make decisions. 1. Building Blocks of Thought Concepts: Mental groupings of similar objects (e.g., the concept of "Dogs"). Prototype: The best example of a category. (If I say "Bird," you probably think of a Robin, not a Penguin. The Robin is your prototype). Schemata (Schema): A mental framework that helps us organize and interpret information (e.g., your "School Schema" includes desks, teachers, and bells). 2. Problem-Solving Tactics Trial-and-Error: Trying random solutions until one works. (Slow and inefficient). Algorithms: A step-by-step, logical rule that guarantees a solution. (e.g., a math formula or checking every single aisle in a store to find milk). Heuristics: A mental shortcut or "rule of thumb." It's faster than an algorithm but can lead to errors. (e.g., looking at the signs above the aisles to find the milk). 3. The Biases (Why we make mistakes) Confirmation Bias: Searching for information that supports our preconceptions and ignoring everything else. Hindsight Bias: After an event occurs, believing we "knew it all along." Anchoring Bias: Getting "stuck" on the very first piece of information offered. (e.g., if a shirt is "on sale" for $50 down from $100, you think $50 is a deal, even if the shirt is only worth $10). Availability Heuristic: Estimating the likelihood of events based on how easily they come to mind. (e.g., being afraid of a plane crash because you saw one on the news, even though car crashes are more common). Mental Set: The tendency to approach a problem in one particular way, often a way that has worked in the past but may not work now. WEEK 7: Memory Memory is the persistence of learning over time. 1. The Three Stages of Memory Encoding: Getting information into our brain. Semantic Encoding: Encoding the meaning of words (Deepest processing). Visual Encoding: Encoding images. Acoustic Encoding: Encoding sounds. Storage: Retaining that information. Retrieval: Getting the information back out. 2. Types of Storage Short-Term Memory (STM): Holds about 7 items (plus or minus 2) for about 20 seconds. Long-Term Memory (LTM): Unlimited capacity and can last a lifetime. Explicit (Declarative): Facts and experiences (Semantic = facts; Episodic = your life stories). Implicit (Procedural): Skills (like riding a bike or typing). 3. Memory Sins & Failures Schacter’s Seven Sins: Includes Transience (fading over time), Absent-mindedness (forgetting your keys), and Persistence (unwanted memories that won't go away). Amnesia: Anterograde: You can't form new memories. Retrograde: You can't remember the past. 4. Enhancement Techniques Chunking: Organizing items into familiar, manageable units. Spaced Repetition: Studying small amounts over a long time rather than cramming. Mnemonic Devices: Memory aids like "PEMDAS" for math. 5. The "Subtle" Memory Sins (Week 7) The Serial Position Effect: You are most likely to remember the beginning of a list (Primacy Effect) and the end of a list (Recency Effect), but you’ll probably forget the middle. Pro-Tip: This is why you should study the "middle" weeks (Week 4, 5, 6) extra hard! Misinformation Effect: This is why eyewitness testimony is shaky. If someone asks, "How fast was the car going when it smashed into the pole?" you will remember the car going faster than if they said "hit." WEEK 8: Lifespan Development Developmental psychology examines how we change physically, cognitively, and socially from "womb to tomb." 1. Cognitive Development (Jean Piaget) Piaget believed children think differently than adults and move through four stages: Sensorimotor (0–2 years): Exploring the world through senses. Key milestone: Object Permanence (realizing things still exist even if you can't see them). Preoperational (2–7 years): Symbolic thought (make-believe) but lacks logic. Key trait: Egocentrism (thinking everyone sees the world exactly as they do). Concrete Operational (7–11 years): Logical thinking about physical objects. Key milestone: Conservation (understanding that volume stays the same even if the shape of the glass changes). Formal Operational (12+ years): Abstract reasoning and hypothetical "what if" thinking. 2. Psychosocial Development (Erik Erikson) Erikson focused on "crises" we face at each age. Trust vs. Mistrust (Infancy): Is the world safe? Identity vs. Role Confusion (Adolescence): "Who am I?" (This is the most common exam question). Integrity vs. Despair (Late Adulthood): Looking back on life with satisfaction or regret. 3. Moral Development (Lawrence Kohlberg) Pre-conventional: Doing the right thing to avoid punishment or get a reward. Conventional: Doing the right thing because it's the law or to fit in. Post-conventional: Doing the right thing based on universal ethical principles (even if it breaks the law). 4. Parenting Styles Authoritative: High warmth, high rules. (The "Goldilocks" style—best outcomes). Authoritarian: Low warmth, high rules. ("Because I said so!"). Permissive: High warmth, low rules. (More like a friend than a parent). Uninvolved: Low warmth, low rules. (Neglectful). WEEK 9: Learning Learning is a relatively permanent change in behavior due to experience. 1. Classical Conditioning (Ivan Pavlov) Learning by association (connecting two stimuli). Unconditioned Stimulus (UCS): The natural trigger (Food). Unconditioned Response (UCR): The natural reflex (Drooling for food). Neutral Stimulus (NS): A trigger that means nothing yet (A Bell). Conditioned Stimulus (CS): The bell after it has been paired with food. Conditioned Response (CR): Drooling for the bell alone. 2. Operant Conditioning (B.F. Skinner) Learning by consequences (Rewards and Punishments). Positive Reinforcement: Adding something good to increase behavior (A gold star for working). Negative Reinforcement: Removing something bad to increase behavior (The car stops beeping when you buckle your seatbelt). Positive Punishment: Adding something bad to stop behavior (A speeding ticket). Negative Punishment: Taking away something good to stop behavior (Taking away your phone). 3. Observational Learning (Albert Bandura) Learning by watching others. Famous study: The Bobo Doll Experiment, where kids imitated adults punching a doll. 4. The "Fine Print" of Learning (Week 9) Spontaneous Recovery: After a behavior has been "extinct" (gone away) for a while, it suddenly reappears out of nowhere. (Like Pavlov's dog suddenly drooling at a bell weeks after he stopped). Generalization vs. Discrimination: Generalization: Fearing all dogs because one bit you. Discrimination: Only fearing the specific dog that bit you. WEEK 10: Social Influences This is the study of how the "situation" and "group" overpower the individual. 1. The Stanford Prison Experiment (Zimbardo) Demonstrated the power of Social Roles and Scripts. Ordinary students became abusive "guards" or submissive "prisoners" simply because of the role they were assigned. 2. Influence & Conformity Normative Social Influence: Conforming to fit in and be liked (Dressing like your friends). Informational Social Influence: Conforming because you think the group has more info than you (Following the crowd in a new city). Obedience (Milgram): Following orders from an authority figure, even if it hurts someone else. 3. Group Dynamics Social Loafing: Working less hard in a group than when alone (The "Billy" effect). Deindividuation: Losing self-awareness and self-restraint in a large crowd or behind an anonymous screen. Group Polarization: When group discussion leads to more extreme opinions. Bystander Effect: People are less likely to help if others are around due to a Diffusion of Responsibility. 4. Thinking Patterns Fundamental Attribution Error: Blaming someone's personality for their behavior while ignoring the situation. Cognitive Dissonance: The "icky" feeling when our actions don't match our beliefs (e.g., you hate lying, but you just lied to your mom). We usually change our beliefs to match our actions to feel better. 5. Social Psych "Secret" Terms (Week 10) Self-Serving Bias: When we succeed, we take the credit ("I'm a genius"). When we fail, we blame the situation ("The test was unfair"). Foot-in-the-Door vs. Door-in-the-Face: Foot-in-the-Door: Ask for something tiny first, then the big thing. Door-in-the-Face: Ask for something HUGE (get rejected), then ask for the smaller thing you actually wanted. They are more likely to say yes because it feels like a "compromise." WEEK 11: Multiculturalism & Diversity This is the study of how culture, identity, and group values shape our behavior and how we interact with others. 1. Cultural Values Individualism: Cultures that value personal independence and "Me" goals (e.g., USA). Success is based on personal achievement. Collectivism: Cultures that value group harmony and "We" goals (e.g., Latin America, Asia). Success is based on doing what is best for the family or community. 2. Acculturation (How we adapt to new cultures) Integration: The "Best of Both Worlds." Keeping your original culture while participating in the new one. Assimilation: Giving up your original identity to fully "blend in" with the new culture. Separation: Keeping your original culture and avoiding the new one. Marginalization: Feeling like you don't belong to either culture (The "lonely" state). 3. Metaphors for Society The Melting Pot: The old idea that everyone should blend together and lose their differences to become one "American" identity. The Salad Bowl: The newer idea where cultures live together but stay distinct. You can see the "tomatoes" and the "lettuce"—everyone keeps their unique flavor. 4. Social Barriers Microaggressions: Small, daily slights or "backhanded compliments" toward marginalized groups (e.g., "You’re so articulate for someone from your neighborhood"). Prejudice vs. Discrimination: Prejudice is the thought/feeling (pre-judging), while Discrimination is the action (treating someone differently). WEEK 12: Stress & Health This is the study of how our brain's "appraisal" of the world affects our physical and mental health. 1. The Appraisal Process (Lazarus) Primary Appraisal: Judging if a stressor is a Threat (harmful) or a Challenge (potential for growth). Secondary Appraisal: Evaluating your tools. "Do I have the resources to handle this?" If yes, stress stays low. If no, panic sets in. 2. The Body’s Response (Selye’s GAS) General Adaptation Syndrome (GAS): The three stages of how your body reacts to stress: Alarm: Fight-or-Flight. Heart races, adrenaline hits. Resistance: Staying on "high alert" to cope. This is where you grind through the week. Exhaustion: Your battery dies. Your immune system crashes, and you get sick (The Cohen Cold Study). 3. Types of Stress Eustress: "Good stress." The kind that motivates you to finish a project or perform well in a game. Distress: "Bad stress." Chronic pressure that leads to burnout, fatigue, and health problems. 4. Coping Strategies Problem-Focused Coping: Attacking the problem directly. (Example: Time-Blocking your homework so it isn't overwhelming). Emotion-Focused Coping: Managing the feelings. (Example: Going to the Gym or meditating to stop feeling anxious). 5. Stress "Secret" Terms Cortisol: The primary stress hormone. Great for emergencies, but too much of it "eats" your memory and weakens your heart. Psychoneuroimmunology: The fancy word for the study of how your brain (stress) talks to your immune system. WEEK 13: Mental Wellness & The Science of Happiness The goal of this week is to identify the psychological frameworks and empirical studies that explain how humans build resilience and long-term well-being. 1. The Three Dimensions of Happiness (Module 14.5) According to the textbook, happiness is an enduring state consisting of joy and contentment. It is built through three "lives": The Pleasant Life: Attaining and savoring daily pleasures that add joy to the moment (e.g., the aroma of coffee or the feeling of sunshine). The Good Life: Identifying your unique skills and using them to enrich your life. This is where you find the state of Flow—being so "in the zone" that you lose track of time. The Meaningful Life: Using your talents and efforts in the service of the greater good or to help others, which provides a deeper sense of fulfillment than pleasure alone. 2. The Four Pillars of Well-Being (Wellness Studies) Based on Dr. Richard Davidson’s research, well-being is a "trainable skill" rather than a fixed trait. It is built on: Awareness: Noticing what your mind is doing in the present moment (meta-awareness). Connection: Cultivating kindness and healthy social relationships, which are the #1 predictor of long-term health. Insight: Having curiosity about how your own mind works and not believing every negative thought as a "fact." Purpose: Having a clear sense of direction or a "life compass" that guides your daily actions. 3. Empirical Evidence: The Creswell et al. Study (2014) This study provided scientific proof that mental training has biological effects: The Setup: An experimental design where students were randomly assigned to either a mindfulness group or an analytic control group. The Independent Variable: Brief 3-day mindfulness meditation training (25 mins/day). The Dependent Variable: Biological stress markers (Cortisol levels) and self-reported stress. The Result: The mindfulness group showed significantly lower cortisol levels, proving that meditation fosters biological resilience to stress. 4. Scientifically Proven Benefits of Gratitude Research shows that gratitude is a powerful "reset" for the nervous system: Physical: Improved sleep quality and duration; fewer reported aches and pains. Psychological: Reduces "toxic" emotions (envy, resentment) and increases mental strength. Studies of 9/11 survivors showed gratitude was a major factor in preventing PTSD. Social: Encourages "pro-social" behavior, making people more likely to form and maintain new relationships. 5. Mindfulness vs. Meditation (The State vs. The Practice) It is critical to distinguish between these two often-confused terms: Mindfulness: A state of being. It is the quality of being fully present, aware of where we are and what we’re doing, without being overly reactive or overwhelmed. Meditation: The formal practice or "mental gym" used to train the brain. It is the intentional time set aside to practice techniques that eventually lead to a consistent state of mindfulness. 6. Key Terminology & Cognitive Traps Affective Forecasting: The human tendency to overestimate how much future events (both good and bad) will affect our long-term happiness. We assume milestones like "perfect grades" will provide permanent joy, but they usually don't. Optimism & Resilience: Optimism is the general tendency to expect good outcomes. It is the "engine" of resilience—the ability to "bounce back" from major life stressors (like those listed on the SRRS). Problem-Focused vs. Emotion-Focused Coping: * Problem-Focused: Dealing with the stressor directly (e.g., studying for the test). Emotion-Focused: Managing the feelings associated with the stressor (e.g., taking a nap or exercising)

CONTRACTS Definition of Contract- A legally binding agreement made between two or more persons, intended to create legal obligation between them and to be legally enforceable. An agreement is an exchange of promises between two or more parties. (Offer and acceptance) Concept of a Contract A contract is an agreement that is enforceable by law. A contract therefore has legal implications for the parties who enter into a contract. A mere agreement is not legally binding and therefore neither of the parties is liable if anyone breaks the agreement. What makes a contract different from an agreement? A contract requires not only an agreement between parties but also something of value must be passed from one party to the next to make the contract binding. For example, you offer to sell a friend your used text books for $1000.00. After inspecting your textbooks the friend agrees and pays $1000.00. The $1000.00 paid here is the consideration i.e. something of value that is passed from one party to the next. Consideration is the price paid for a promise. You promised to let your friend have your textbooks if he paid $1000.00. This $1000.00 makes the agreement binding. You are therefore obligated to deliver the books to your friend and cannot decide to sell the books to someone else or to ask for a higher price. Your neighbour asks you to mow his lawn after which he will pay you $200.00. You accept this offer and mow the lawn. The work done here is an act of forbearance. You are giving something of value to your neighbour to receive payment for the job. The consideration in this case is the work done by you. It is the price that you have paid for the promise to be paid money for the job. Consideration passes from promise to promise. Characteristics of a Simple Contract There must be offer and acceptance. The offerer is the party that makes the offer and the offeree is the person that the offer is being made to. There must a clear offer and clear acceptance for a contract to be binding. There is an agreement of the minds. An offer is a promise in exchange for performance by another party. An offer can be revoked or terminated under certain conditions. There are also times when an offer can be negotiated to create a counter-offer. Acceptance occurs when an offeree agrees to be mutually bound to the terms of the contract by giving consideration, or something of value like money, to seal the deal. Keep in mind that acceptance follows the mirror image rule, in that acceptance is valid if the product or service rendered is exactly what was contained in the offer. Consideration is the price paid by one party for the promise of the other. Thus if one party promises to provide goods or services, something of value must be given in exchange. This may be in the form of money, goods, services or it may be an act of forbearance. The capacity to contract – Parties to the contract must be over 18 years, of sound mind, not under the influence of drugs or incarcerated. There must be no force, misrepresentation or fraud. Persons should not be forced to sign a contract e.g. blackmail. They should not be lied to e.g. giving the wrong year of a car. Fraud may involve forging someone’s signature. There must be an obvious intention to create legal relations. This is based on the actions of the parties e.g. offer, acceptance and consideration. A contract must be legal- thus, agreements made between parties concerning illegal drugs and any other illegal activity is not a contract. Terms and Concepts Misrepresentation- referring to a false statement of fact made by one party to another party, which has the effect of inducing that party into the contract Types of Misrepresentation- Innocent – untrue statement with reasonable grounds for belief Negligent- untrue but without reasonable grounds. Fraudulent – untrue with the knowledge of the truth to mislead. Breach - Breach of contract is a legal cause of action in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance Void -Contract is the contracts that cannot be enforceable. Voidable- the Voidable Contract is the contract in which one party has the right to enforce or rescind the contract. Rules governing offer and acceptance An offer must be communicated to the other party The offer may be made generally or a specific person, but acceptance must be made by a specific person/s Conditions attached must be brought to the attention of the offeree at the time of the offer for the offeree to be bound. Acceptance must be communicated to the offerer. The offeree must act positively to constitute acceptance. Offer can be revoked before acceptance unless consideration was given. Revocation has to reach the offeree before the offeree has accepted. Acceptance must be unconditional. No counter offers. An offer can be accepted by the person to whom the offer is made. Offer must be within a specified or reasonable time. Offer lapses if time is expired, rejected by offeree, death of offerer or offerree Use the post – Offer is only made when the post reaches the offeree and it is accepted once offeree posts the acceptance whether it is lost or not. Consideration – consideration should either be good or valuable since it is the price one pays to secure the legal obligation on the part of the other. Consideration must be : Real – that is it should be well defined. One should be able to convert it to cash or something of value. Transferable and not already obligated to do by law. Lawful – the subject should be a lawful act or the contract is void. Consideration must not be past i.e past payments not considered Executed – When both parties have fulfilled their obligations (eg Purchase of goods on credit) Executory – The contract still has to be completed. Differences between a Simple & a Speciality Contract & Contract of record. A simple contract can be made orally, in writing or by the implications deemed from the actions of the parties. A specialty contract must be signed by the parties sealed, for example with a company seal and finally it must be delivered. Simple contracts: Be in writing Oral Implied by conduct Consideration is the most important element No special form Examples of specialty contracts include: 1. Mortgages and leases for over three years 2. Sale of land 3. Contracts of insurance 4. Hire purchase agreements 5. Transfer of company shares 6. Assignments of copyright Characteristics of a Speciality Contract Conditions of Simple Contracts must be present. Must be in writing Signed by both parties Stamped or sealed Attestation or witness Delivered by a promisor. Delivery may be made subject to a condition to be performed later giving rise to a escrow. Something of value, such as a deed, stock, money, or written instrument, that is put into the custody of a third person by its owner, a grantor, an obligor, or a promisor, to be retained until the occurrence of a contingency or performance of a condition. An escrow also refers to a writing deposited with someone until the performance of an act or the occurrence of an event specified in that writing. The directions given to the person who accepts delivery of the document are called the escrow agreement and are binding between the person who promises and the person to whom the promise is made. The writing is held in escrow by a third person until the purpose of the underlying agreement is accomplished. When the condition specified in the escrow agreement is performed, the individual holding the writing gives it over to the party entitled to receive it. This is known as the second delivery. Difference between an Offer & an Invitation to Treat An invitation to treat is not an offer but an invitation to bid or bargain for an item. For example, at an auction persons may bid on various items presented. An invitation to treat also occurs also when goods are advertised for sale in the media or in shop windows. Goods in a shop window or goods advertised are not an offer by the owners of the goods but are technically an invitation for interested persons to make an offer. Conditions under which Offer and Acceptance are communicated An offer must be very clearly made. An offer can be made to one person, a group or to the whole world. For example, offering a reward for a lost wallet is an offer to anyone finding the wallet. In cases where there is a counter-offer the original offer is no longer valid. A counter offer is an implied rejection of the original offer. For example: John offers to sell Paula a laptop for $10,000. Paula subsequently offers him $8000.00 as she thought $10,000 was too expensive. Paula has rejected John’s original offer and has made a counter-offer of $8,000. Acceptance must also be clear. In the case of a counter offer a clear acceptance to the new offer must be identified. Contracts may be made orally, in writing or they may be implied. Oral Contracts Are based on what the parties said. For example, asking someone to wash your car for payment Written Contracts Both offerer and offeree must sign the contract document Implied Contracts Implied Contracts are made by the observed actions of the parties involved. For example, someone who sits at a table in a restaurant and places an order has implied that he will pay for the food that will be served. Ways in which Contracts may be Terminated Contracts may be brought to an end: (a) By performance of the parties i.e. each party completing his obligations as stipulated by the contract. (b) By frustration i.e. an event through no fault of the parties that make one party unable to perform the contract. For example: if one party suffers a prolonged illness which makes him unable to perform the contract. (c) By lapse of time i.e. if the time limit set for the contract to be executed by both parties has been passed. For example, sellers of real estate usually require that the buyers pay the full balance on the property within a certain time period after the initial down payment has been made. (d) By the mutual agreement of all parties. (e)If one of the parties become bankrupt after the contract has been signed. (f) By changes in law i.e. where a legal contract is rendered illegal through changes in law. (g) By notice e.g. some firms require that employees give at least one month notice when resigning their positions. (h) If one party dies. (i) By breach of contract-When one party defaults on his part of the agreement i.e. he does not perform his part of the contract. REMEDIES FOR BREACH OF CONTRACT Damages –compensation in case of a breach contract Rescission –to cancel the contract to return parties to former state before contract by mutual agreement of both parties Restitution – Returning property, money and goods after a breach. Waiver of Breach- Non breaching party acceptance of substandard performance Limitation of Liability – a clause that limits liability to a certain point such as the purchase price Specific performance – When damages are not an appropriate remedy the breaching party will have to perform a specific act. Liquidated damages- stipulated amount in a contract that the injured party would receive in the event of a breach of contract. Validity of Contracts Mr. Larry was delighted to see a 50% discount on his favourite brand of shoes at a shoe store 15 miles away. He took sometime off from work to travel to the store. When he arrived at the store he was told that that the brand advertised was sold out but he could choose from other brands available. Mr. Larry was very angry and requested that he be refunded his travelling expenses. Is the owner of the store obligated to refund Mr. Larry his travelling expenses? Answer The advertisement appearing in the newspaper is not an offer by the store but an invitation to treat. Therefore readers were being invited to make an offer for items advertised. The owners of the store are therefore in no way obligated to Mr. Larry. Hope stopped at a convenience store on her way home to purchase a few items. She handed the cashier her credit card and was surprised when she was told that it declined. She apologized and explained that she did not know why her card declined but she will call the bank in the morning. Susan further explained that she had just enough cash with her to get home and so she could not pay for the goods. The cashier was very angry and asked the manager to intervene. The manager insisted that she pay for the goods. Is Sandra obligated to pay for the goods? Answer Sandra has entered into a contract with the convenience store. She made the offer at the cashier counter when she presented the goods to be cashed. The cashier accepted the offer by cashing the goods. In this situation it is up to the manager of the convenience store to accept Hope’s apology