CONTRACTS• The language of business• Business people dealing with each othero What their rights and duties areo Doesn’t have to be in writing, may be oral, but it is best to put it in writingDefinition – a legally enforceable agreement • Legally Enforceable = if not followed through with contract, you are able to sue in court, court can issue a remedy (usually money)Agreements = legally and sociallyK = symbol of contractContracts are within an agreement• Illegal agreements are not legally enforceable o Ex. Student was suspected of cheating, the teacher found out since everybody knew, the person accused hired a hit man to kill the person who ratted the student out (illegal because hiring a hit man is against the law)• Social agreements are illegal too waste of courts timeFLORIDA STATUTES (2012)Pre-Nuptial (before marriage)/Post-Nuptial Contracts (after marriage)732.702 Waiver of spousal rights. –(1) The rights of a surviving spouse to an elective share, intestate share, pretermitted share, homestead, exempt property, family allowance, and preference in appointment as personal representative of an intestate estate or any of those rights, may be waived, wholly or partly, before or after marriage, by a written contract, agreement, or waiver, signed by the waiving party in the presence of two subscribing witnesses…• You have certain inheritance rights, if you want it changed it must be on paper signed = formality(2) Each spouse shall make a fair disclosure to the other of that spouse’s estate if the agreement, contract, or waiver is executed after marriage. No disclosure shall be required for an agreement, contract, or waiver executed before marriage.• Disclosure = tell each other what assets you have • Fair disclosure = telling each other your assets within reason, not necessarily every single thingMarriage is a social agreementNuptial = relating to marital agreementPre-nuptial = usually for wealthier people or blended families, smart, less stress and time if divorce occurs, taken care of before marriageKsAgreementsExample: Kate and Prince – Prince is to wed Kate Middleton, he is advised to have her sign a pre-nuptial agreement because he has so much money and there is a lot at stake, they are rare in Britain and barely recognized Example: Catherine Zeta Jones and Michael Douglas – the prenuptial agreement states that Jones gets $1.5 million every year they are together after the divorce, 10% of his assets from the day of marriage, and an additional $5 million if he is caught cheatingCustody is up to the court’s final decisionESSENTIALS OF A CONTRACT1) Agreement – manifestation (showing) of mutual assent (=show each other there is an agreement of terms)a. The Objective Theory of Contracts (“Meeting of the Minds”) - Mutual, know and agree - Through words, create a mutual assent (oral or in writing)- Subjective Theory = what was in the mind, chaos -Example: Seller sends a letter to buyer of a horse, seller says he will sell for $2200, the buyer accepts and sends a check for $2200, the seller gets the check but calls the buyer saying there was an error and he had originally asked for $2500, the buyer said it was already in writingDispute – they had a deal and both agreed, the seller says no because its not what he intended (his mind was far apart), the judge ruled in favor of the buyer because “objective theory of contracts,” that information of $2200 was written down 2) Obligation – legal duty TYPES OF CONTRACTS6 most common typesA. Express – agreement manifested in words (oral or written)a. Ex. Contract of sale (buying a car)b. Ex. Renting an apartment from a landlordB. Implied – agreement manifested by conduct (e.g. dental appointment)a. Ex. Agree to buy product from a store, buyer puts it on counter to pay for itemb. All terms are impliedly reasonable, bring in evidence of impliedly reasonable aspect to come to courtc. Ex. Dental Appointment – when you make an appointment you agree that you will pay for the service, the dentist can sue you if you don’t payi. Evidence of impliedly reasonable aspect would be quotes from other dentist offices C. Unilateral – promise for an acta. ONE – one promise in return for one actb. Ex. Reward contract for lost dog, $100 for whoever finds dogc. Contract comes into existence ONLY once the act is performed D. Bilateral – promise for a promisea. Most commonb. Promise to do something, if you promise to do something elsec. Ex. Landlord rents house, renter paysE. Executory – not yet performeda. Ex. Hire someone as research intern paying $5000 a moth, but the job hasn’t started yet (it is in the future)F. Executed – completely performed a. Ex. Research internship is over, payments are madeb. No longer an employee, no money is owed ELEMENTS OF A VALID CONTRACTA. Mutual Assent ((1) offer and (2) acceptance)a. Sell something, buyer agreesb. AgreementB. Considerationa. The bargain for exchangeb. Ill do this, if you do that for mei. Ex. Sell car, if you pay me moneyc. Two way streetd. Exchange is necessary, makes deal enforceable C. Capacity = mental, cannot make a fully binding contract if any of the statements below are valida. 1) Old enoughb. 2) Sane enoughc. 3) Sober enoughd. Age of adulthood for most things is 18 years of age, there are exceptions though (alcohol consumption) D. Legality a. Legal purpose of the contract OFFER: ESSENTIAL ELEMENTSGuidelines for an offerA. Definition – a promise to render a stated performance in return for the requested counter performance (“do this for me and I will do that for you”)1) Promissory language requirement AND2) Effect of equivocal language (can create problems) - Promissory Language Requirement = language which sounds like a promise-Best word to use is “promise,” use those words to avoid being attacked-“I will” buy or sell, showing commitment-Equivocal Language = you are sitting on the fence, being wishy-washy, we want commitment, don’t say “I’m thinking” B. Essential terms must be certain (critical, important terms) 1) Avoid ambiguous (unclear, capable of more than one meaning) language-Quantity is very important (“some” instead of an exact amount)-“Part” is a bad word, should be more specific, how much is a “part”- Essential = names of parties (buyer, seller), the subject of the contract, price (no dollar amount needed as long as what is it to be paid is formulated)C. Promise must be communicated under
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