Chapter 13 I Contract K a legally enforceable agreement between 2 or more parties that is comprised of at least one promise Not required to be written Three parts to every contract Courts are only concerned with the parties outward manifestations of intent not internal thought processes The courts interpret the parties words and actions in a way a reasonable person would A Agreement consists of an offer by one party called the offeror and an acceptance of the terms of the offer by the other party called the offeree B Consideration the bargained for exchange of what each party gets in exchange for his of her promise under the contract C Contractual capacity is the legal ability to enter into a binding agreement People suffering form mental illness and intoxicated persons do not have capacity D Legal object means that the subject matter does not violate the law or public policy II Defenses to the Enforcement of a contract A Lack of a genuine assent Contracts are supposed to be entered into freely by both parties but sometimes the offeror secures acceptance of hte agreement through improper means such as fraud duress undue in uence ot misrepresentation B If the Contract lacks Proper Form typically means it lacks a writing The contract itself does not have to be in writing but a writing meeting certain criteria that con rms the existence of the contract must exist III Objective theory of contracts A we base the existence of a contract on the parties outward manifestations of intent and we base its interpretation on how a reasonable person would interpret it IV Types of contracts A Unilateral one promise the offeror wants the offeree to do something not to promise to do something only way to accept is through performance lost dog 1 Promisor is the one who promises the Promisee something after they do some act or performance B Bilateral two promises 1 Promisor promises something to the Promisee if they promise to do the act or performance Promise in exchange for a promise C Express Vs Implied Contracts 1 Express contracts are all clearly set forth in either written or spoken words Implied contracts arise not form works but from the conduct of the parties 2 a if you had a dental emergency and the dentist pulls your tooth out without talking about payment you still have an implied contract D Executory promises have been made but the action has not yet been performed E Executed fully performed contract F Classi cations of contract enforceability 1 Valid contains all elements and is legally enforceable contract 2 Voidable One or more parties have a defect that keeps them from making a valid contract ex person is under 18 duress undue in uence if this is the case and part of the contract has been executed and one party wishes to terminate everything is restored to the condition before the contract 3 Void in effect not a contract at all either its object is illegal or has a defect so serous that it is not a contract 4 Unenforceable Sometimes a contract may be valid but unenforceable Statute of limitations has passed Contract was valid but because the time has passed it is no longer enforceable Statute of frauds due to the type of contract it is required to be in writing G Informal Does not REQUIRE a writing to be enforceable can still be in writing 1 any contract that is not a formal contract is informal H Formal Does require a writing to be enforceable has a special form or must be created in a speci c manner 1 Does not need to be written in a formal setting One time a contract was written on a cow and it was enforceable because it was in writing V Interpretation of Contracts A Plain meaning rule states that if a writing or a term in question appears plain on its face we must determine its meaning from just the four corners of the document Chapter 14 I Agreement which is made up of an offer and acceptance A Elements of the Offer 1 Serious intent by the offeror to be bound to an agreement a Joking or speaking in anger does not count b an invitation to negotiate a price is not an offer because it does not express intent to sell It could be a mere inquiry about potential willingness to sell c Advertisements an offer to make an offer 2 Reasonably de nite terms all material terms must be included a Material terms allow a court to determine damages in the event that one party breaches the contract subject matter price quantity quality and parties 3 Communication to the offeree must be communicated to the offeree or the oferee s agent B Termination of the offer can occur in ve ways 1 Lapse natural causes a Term if given b Reasonable amount of time 1 What a reasonable person says it is given the set of circumstances 2 Even if a term is stated offeror can revoke any time prior to business setting acceptance 2 Revocation suicide is only effective when the offeree receives it a The offeror takes back the offer any time prior to acceptance Must communicate b How to protect against revocation Answer Purchase an irrevocable offer 1 Example Farmer A wants to buy Farmer Bs farm Farmer B says it is 500K and Farmer A doesn t have that Farmer A buys an option contract in which he has 6 months to get the money together 2 The irrevocable offer is called an Option Contract an absolute right to buy c A certain thing d A certain amount of time e A certain amount of money 3 Rejection murder a Offeree says no or counteroffers the offeree and the offeror change positions The second the offeree rejects it is terminated b Honest Inquiry does not terminate an offer Person asks question or makes comment about high price Would you be willing to take 450 in cash That price is way too high 4 Operation of Law capital punishment a Court declares the offer dead 1 Destruction of subject matter 2 Death of an offerer offeree 3 Subsequent illegality of subject matter 4 Etc 5 Death or Incapacity a if the offeror dies or loses legal capacity to enter into a contract it is terminated even if the offeree does not know about it Unless there was an option contract where the offeree can still exercise his option C The Acceptance offeree can manifest intent to enter into the contract by performance or by a return promise 1 Unilateral Contact ful lled 2 Bilateral Contract promise a Unequivocal accordance with the terms b Must do exactly what the contract asks her to do in order for it to be a Mirror image rule Must accept the exact promise and the return promise must be a mirror image 3 Words or Conduct showing a willingness to be bound