BUL3310 Final Exam Review Lecture 10 Contracts Contract formation Offer acceptance consideration as well as capacity and legality Verbal contracts are just as enforceable as written contracts Offer offer must be communicated from person who is making the offer to the person who is possibly accepting the offer o Cannot transfer offer to another acceptor unless offerer is willing Elements of an offer 1 Identify the parties 2 Subject matter of proposed exchange must specify all variations of what is being offered subject matter must be clear 3 Time for performance a timeframe for when the performance can occur 4 Price Distinguish offers from Preliminary negotiations only statements that are not solid thinking about the potential of a deal but not giving an offer Ads this is not specific enough to create an offer an invitation to potentially make an offer Social imitations invitation to weddings or social events are not considered offers Offers in Excitement or Jest an irrational statement that spark from emotional excitement Acceptance Revocation revoking is possible in many ways o It is not effective until the offeree has been notified of it Mailbox rule when instructions are not given for acceptance you follow the mailbox rule o Ex over the phone acceptance emails Consideration giving up something and getting something on both parties Areas where consideration is defective Promises to make gifts not enforceable under law o Ex promise to give someone baseball cards if I pass away This is not enforceable because there is not an exchange o Ex promise to buy a car if I like it Illusory promises promised on ones belief or control Past consideration not promised o Ex I m going to pay for that care you gave me in the past cannot enforce o Contracts look for offers in the future not past Preexisting duties rewards for fulfilling an opportunity but the area follows under their duty o Ex catching a criminal that has a reward on top of his head Contract formations that are Voidable no legal effect issues with capacity of a person when entering a contract Void contracts Guardianship person who has a guardian cannot be in a contract affairs are held by the guardian Habitual drunkard limited capacity due to excessive use of drugs or alcohol Duress by physical threats agreement to contract when under serious threat Voidable contracts Minors have better ability to get out of contracts Duress by economic or improper threat Intoxication entering into a contract under the influence o Ex boss makes employee sell stock options or they lose their job Undue influences affects often on the elderly contracts made with someone who is more susceptible due to various reasons such as age Fraud knowingly false representation of fact Fraud in factum VOID fraud in the actual documents Fraud in execution VOID how the contract is actually done o Forging of signatures Fraud in inducement VOIDABLE opportunity based on falsehoods knowing misrepresentation of something o Making a job sounds way better than It actually is o Securities a broker makes an investment sound incredibly better than it actually is Wolf of Wall street pink sheet selling to the wealthiest 1 percent Bilateral mistake both parties mistake and mistake relates to a fact on which Doctrine of mistake the contract relies upon Unilateral mistake o Ex seller bears risk of selling something that might be of much higher value Statue of Frauds certain contracts must be in writing Years if over 1 year must be in writing Land Executors promises must be in writing Marriage must be in writing Goods over 500 Suretyship promise to pay another s debt Lecture 11 UCC uniform commercial code Sales and leases Sales are covered by article 2 and Leases by article 2a Mainly deals with the sales of GOODS UCC does not cover real property services or intangible property like stocks and bonds o These are covered by common law Where it gets tricky ex farmland The land is covered by the common law however the actual crops or goods of the land are covered by the UCC o Another ex a chandelier is a good or product but if it is attached to a house real property than it is now apart of the real property and under common law Leases ex a lease on a apartment o Remember title of the item does not switch from lessor to leasee when leasing out a product Risk of Loss to goods o Ex Florida company in business of grapefruits that ship all around o Who carries the risk of loss of goods Depends on shipment or destination contracts If not designated it is assumed the parties are using a shipment contract is the default rule o The title transfer the moment the goods are tendered to a carrier with a shipment contract o So if company gives grapefruits to the company that transports it the liability and title to the grapefruit now lies with the transporter company On the other hand the destination contract states that the Florida grapefruit company has title and liability all the way till the grapefruit have been delivered to the buyer Duties of sellers or lessors The rule of perfect tender breached when seller provides goods that are not valid under the order they asked for EX a buyer orders nails and some come in 1 inch and some come in 1 and when buyer only asked for 1 inch o Buyer can accept it even if its wrong o Buyer can reject the whole order o Or buyer can reject some and accept other parts of the order Right to cure says if seller messes up order and if there is still time to perform contract under the certain time period in the contract than seller can send over goods to correct the issue without failure Duties of buyers or lessees Must make the Payment payment is usually sent in when goods are received Right of inspection can have the goods inspected before payment Acceptance presumed when a buyer fails to reject goods within a reasonable time o Basically states that the buyer may not be able to get out of a deal if the buyer does not reject certain goods within a reasonable amount of time due to the fact that goods can go bad Therefore buyer is presumed to have accepted the goods Warranties Express warranties o Found in many commercial transactions o Basically when company says a product will do something like a car will go 50mph on the road then it must go 50mph o Ex a person orders a wool coat but a leather one shows up in the mail this is a breach in warranty Implied warranty of merchantability o When one is in the business of selling something merchant o Ex refrigerator dealer
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