Contracts Business Law Test 4 Guide Contracts IMPORTANT Definition a legally enforceable agreement Legally enforceable means that when a person fails to live up to the agreement oThe injured party can sue the other party for breach of contract K is a symbol for contract in any legal paperwork Contracts are a small subset of agreements think circle diagram NOT all agreements are contracts oNot every agreement is legally enforceable Illegal agreements are NOT enforceable Ex a student was caught cheating in the law school The dean s office was aware of the cheating The student hired a hit man to kill the dean If the hit man had finished the job and the student refused to pay oThe hit man would not be able to sue because their agreement is NOT legal Ex gambling contracts are also illegal and are NOT legally enforceable Social agreements are NOT legally enforceable Ex if you make a date with someone and don t show up you cannot sue them This is because we want to prevent an avalanche of legal cases over hurt feelings or breach of etiquette As seen in the following examples sometimes lines are blurred A young girl was asked to prom by a young man oShe went out and bought an expensive dress and shoes and had appointments for pedicures hair etc made oHe called an canceled the night before oThis case went to court and eventually settled oThis wasn t just a social agreement because there was money spent Another example would be a canceled wedding with a lot of expenses oIn this case this would be considered a business agreement in terms of the relationship with the vendors Prenuptial before and postnuptial after agreements Nuptial refers to a marriage In blended families oYou have The husband s kids from a previous marriage The wife s kids from a previous marriage The husband s and wife s kids from the current marriage oA prenuptial agreement would address the needs of each these different groups Wavered spousal rights surrendered rights oIn Florida a pre or postnuptial agreement must be a formal agreement def on the test In writing Signed Two witnesses oRights can be waved to property shares etc Meaning if you feel like your future spouse is not entitled to your house in the case that you divorce this can be stated in a post or prenuptial agreement oThe law does not require you to disclose your full financial situation to your spouse before committing to a prenuptial agreement After you are married you must make a fair disclosure of your assets and financial situ ation to your spouse before making a postnuptial agreement Full Disclosure I have 100 stocks in Apple Exact numbers details Fair Disclosure I have 1 million in assets Not exact Give a broad picture oFamous prenuptial agreements Prince William and Kate Middleton Prince William is second to the throne of Britain Pre nups are common in the US but not in Britain Most lawyers recommend that William and Kate get a prenup Catherine zeta Jones and Michael Douglas Catherine gets 1 5 million dollars for every year they are together Catherine also gets 5 million if she catches him cheating Michael gets all wedding gifts worth more than 20 000 and his privacy about the relationship She gets 5 of his worth once they are married Essentials of a contract Agreement manifestation a showing of of mutual assent consent Agree on same terms oBoth parties show that they agree on the same terms on the same issues This agreement can be shown orally or in a written format preferred oThe objective theory of contracts Meeting of the Minds This theory basically says that both parties minds must agree to the same terms However we cannot read minds so the court only interprets what is written Ex someone is selling a horse and sends a letter to the buyer The letter states that he will sell the horse for 2 200 The buyer likes the offer and returns a letter accepting terms and attaches a check for 2 200 The buyer wrote 2 200 but meant to write 2 500 The buyer sues seller for breach of contract The seller says they didn t have a meeting of the minds because they didn t agree to the same terms and therefore don t have a contract If this were to go to court the court can only base this on what was objectively what was seen on the paper or spoken manifested In this case what was written in the letter objective manifestation was the decided price because we cannot read the minds or hearts and the 2 200 sale is a contract Obligation legal duty oA contract must have a legal commitment Ex social or illegal provisions do not constitute a legal commitment Types of contracts Express Contract agreement manifested in words oral or written oEx agreeing orally to pay your friend 400 month to stay at their apartment for a month oEx buying a car Sign a contract in writing to pay for the car Implied Contract agreement manifested by conduct oEx at a dental appointment The dentist finds a patient s cavity during the appointment The patient agrees to have it filled but did not ask the price The patient was asked to pay 500 The patient refused and argues that he didn t make a contract Therefore according to the patient he is not responsible for payment The dentist argues that there is an implied contract made because even though the fees weren t discussed the patient agreed to have the services performed Therefore the patient is responsible for payment Rule in an implied contract all the terms of the contract are impliedly reasonable This means that the jury would decide what is reasonable Surveys of multiple dentists of what a reasonable fee would be for filling a cav ity would help the jury decide if the 500 fee is reasonable Unilateral one Contract promise for an act oEx A reward contract I promise to pay you 100 if you find my dog This is different from a bilateral contract because it is not promising you pay for look ing for the dog It is only promising to pay for the act of finding the dog If you just go looking for the dog you will not get paid The act of finding the oAnother ex Realtor contracts dog is crucial in order to get paid Realtors only get paid if they sell the house Can spend 100 hours trying to sell the house but won t get paid Bilateral Contracts a promise for a promise oMost contacts are bilateral Ex Employee and sales contracts are usually bilateral As an employee you promise to perform work tasks in exchange for the promise to receive cash compensation Can be oral or written Executory Contracts not yet performed performed in the future oEx if you have a
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