BCOR 3000 1nd Edition Exam 3 Study Guide Lectures 13 20 Business Law Midterm 3 Study Guide Chpt 9 14 Chapter 9 Contracts Overview Key Terms and Definitions What s a contract a contract is a set of promises an agreement made private law Contract Law Sources Common Law court decisions Contract Freedoms 1 Freedom of Contract courts cannot interfere with valid contract 2 Freedom from Contract where courts can protect people in contracts Contract Parties 1 Offeror makes the offer 2 Offeree recipient of offer Bilateral Contracts Seeks a promise from the offeree and then an action 2 steps to FORM contract Unilateral Contracts Seeks action only 1 step to FORM contract There are 4 types of classification of contracts 1 Formal in a particular form 2 Informal no particular form 3 Express created by words 4 Implied in Fact based on conduct and reasonable expectations Is there a difference between executed and executory yes Executed means every obligations has been performed Executory means that there are items still left undone and it will remain in this state until all are completed Similarly with void and voidable Void means that it no longer is what it is Voidable void able means that one can make something void Quasi Contract no contract but the court implies one It is also known as implied in law contract Some examples to further explain this contract are below Ex Ambulance no in a formal contract but will still have to pay for the ride Ex Taking advantage of some else s mistake Best Buy drops off TV at wrong address So you take it in your home and set it up Get a call from best Buy that they made a mistake Best Buy comes and gets it Not required to pay Ex Server brings our wrong food item and you eat it anyways must still pay for it Think of in terms of an emergency IF this is the case can receive payment for services Contract Interpretation 7 parts 1 A law question judge decides Question of Fact v Law If law Judge will decide 2 Plain meaning rule Starting point Ex Contract where company sells you a car 4 wheels and 1 steering wheel 3 Specific terms qualify general terms specific prevision cats are okay will trump the general prohibition against pets 4 Handwritten or typed controls over pre printed supposedly print out last year s lease to renew change dates rent increases by hand written scratch out and re write this will trump the typed contract 5 Ambiguities against the drafter If the contract is unclear it will be decided in the favor of the person who did not write the contract b c unclear with off road and on road capabilities in contract dealership lost 6 Words control over numbers Words will control win over numbers mistakes are more prominent when writing numbers ex 50 000 versus 500 000 7 Words advance principle Object certain words are specific to certain things within a contract Oral Contracts Most are legally valid and enforceable They are just hard to prove in courts Generally try to get it in writing Chapter 10 Agreement Overview Key Terms and Definitions Agreement is the mutual understanding or meeting of minds between two or more individuals regarding the terms of a contract An agreement has two parts 1 offer and 2 acceptance An offer has 3 basic requirements 1 Objective Intent 2 Terms that are reasonably definite or certain 3 Communication to the offeree All 3 of these requirements must exists in order for an offer to be valid 1 Objective Intent An offer is determined by what a reasonable person in the offeree s position would conclude the offeror s words and actions meant There needs to be intent If there is any anger jest or undue excitement then there is no valid offer thus is there is acceptance it is also not valid Ex Understand the Lucy v Zehmer Case p 259 2 Definite Terms Cannot be vague There must be specifics such as the identification of parties the object subject matter the consideration of payment and the time period of payment delivery or performance Does not have to include all minor details Vague Examples for a good price or I ll do some painting for you 3 Communicated to the Offeree The offer must be communicated to the offeree Not effective until received by offeree Only the specific offeree s can accept Advertisements Advertisements are not offers They are more of an invitation to deal On the other side of things very specific ads are offers For example a car ad that presents a stock number is an offer because it is applied to that car only Advertisements work under contract law and truth and advertisement laws Contract law allows doe a contract to be formed with price stated online Truth and advertisement law allows for contracts to apply to one vehicle Offeree Options There are 4 1 Accept 2 Reject 3 Counteroffer 4 Ignore How does an offer die An offer can die when the offeree rejects or counteroffers or the offeror revokes the offer The offeror can only revoke as long as the offeree has not accepted If there is a lapse of time destruction to subject atter death or illegality the offer dies Acceptance Acceptance is the voluntary act by the offeree that shows agreement to the terms of an offer It must unequivocal which means that it has to be clear that you want to accept Must be identical to the offer the Mirror Image rule If there are any changes in the terms of an offer then there can be no acceptance Effective Times 1 Offer when received 2 Acceptance when sent or delivered 3 Rejection when received 4 Revocation when received E Contracts General contract law principles apply Seller Licensor usually sets the terms Clicking is effective as acceptance Unread terms are binding Shrink Wrap Contracts Terms generally enforceable upon opening and using Ex textbooks DVDs software Courts sometimes refuse to enforce Browse wrap terms usually not enforceable because have not been agreed to Terms are on another page Allowed to browse site anyways E Signatures Many kinds of E signatures State law variation though the variation is decreasing Uniform Electronic Transactions Act UETA uniform law most states Cannot deny legal effect solely because signature is electronic Federal E Sign Act Fed Act specifically states that it does not preempt UETA in states that have adopted but it does preempt other state E signature laws E Signatures are just as legal as those on paper Key E Sign Act Provision Agreement to act electronically Deemed received the minute it gets to your Inbox Attribution Notary requirements Errors Timing Document is deemed Sent when leaves or is