BUSA2106 Lecture 13 Outline of Last Lecture I Shareholder power II Business Judgment Rule Outline of Current Lecture I II III Definition of a contract Contract formation Contract breach Current Lecture Contract law Concerns the making and keeping of promises enforcement of private agreements o Purpose Why enforce private agreements through the courts Sources of contract law Civil law State law Common law Services Real estate Employment Insurance Statute Uniform Commercial Code UCC Commercial sale and lease of goods What is a contract Four elements 1 Agreement offer and acceptance 2 Consideration exchange of something of legally sufficient value for a promise 3 Capacity who can make a contract 4 Legality goal of the contract is not illegal and not against public policy 1 Agreement offer Offeror must intend to be bound by the offer Terms must be reasonably certain so that the parties and the court know what they are Offer must be communicated to the offeree so that the offeree knows the terms of the offer Bistro 24 You discover that an advertisement printed in the newspaper for your Special for Two a five course fixed price dinner with wine pairings listed the price as 9 99 rather than 99 99 The phone has been ringing off the hook with Special for Two reservation requests Analyze this from a contract law perspective 1 Agreement acceptance Voluntary act showing agreement to the terms of the offer Words or conduct Unequivocal Mirror image rule Counteroffer Communicated to the offeror Acceptance cont Selected Terms of Use Terms of Use For content that is covered by intellectual property rights like photos and videos you specifically give us the following permission you grant us a non exclusive transferable sub licensable royalty free worldwide license to use any IP content that you post on or in connection with Facebook You will resolve any claim you have with us arising out of or relating to this Statement or Facebook exclusively in a state or federal court located in Santa Clara County You agree to submit to the personal jurisdiction of the courts located in Santa Clara County California for the purpose of litigating all such claims Is there an agreement You received the following letter in today s mail Dear college student We so believe that Encyclopedia Pacifica will help you with your college studies and career preparation that we are prepared to make you an incredible offer the entire 26 volume set for only 2 500 plus shipping and handling We re so sure that you ll want to take advantage of this once in a lifetime offer that we ve already reserved a copy for you We ll put your encyclopedias in the mail November 1 unless we hear from you by that date that you don t want this educationally beneficial offer Sincerely The Marketing Department 2 Consideration Exchange of something of legally sufficient value for a promise Bargained for exchange Distinguish from gifts preexisting duties past consideration Is there consideration Granny promises to give Teo 5 000 on his 20th birthday Granny promises to give Teo 5 000 if he graduates from high school Teo graduates from high school He tries to get Granny to pay him 5 000 after the fact 3 Contractual capacity Who can or cannot make a contract Minors can enter into any contract an adult can but easily voidable Extreme intoxication Mental incompetence 4 Legality Contracts contrary to statute Examples prostitution drug sales Contracts contrary to public policy Restraint of trade e g covenants not to compete Unconscionability disparity in bargaining power between parties such that the weaker party is taken advantage of e g rent to own contracts
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