Presentation Transcript

1. Contract Law

2. What is a contract? A contract is an agreement between 2 or more people to exchange something of value. Examples Cell phone Hiring someone to work on your house Hiring a tutor for school Ordering food at a resturant
3. Elements of a Contract All 4 elements are required for a valid contract Offer – I will buy your bike for $20 Acceptance – Okay Mutual Agreement – both parties agree to everything about the contract Consideration – something of value is exchanged
4. Does a contract have to be in writing? Most do not, however, having a paper document is better in case of future legal actions. (paper is proof) Contracts that have to be in writing Sale of real estate Agreements to pay someone else’s debt Agreements lasting longer than 1 year
5. Contracts that aren’t contracts Some contracts are never legally contracts (void) or can be terminated legally (voidable) Contracts for illegal acts are void Contracts which are unconscionable (heavily in favor of one party) are usually void Most contracts with minors are voidable
6. Exceptions for contracts with minors Most contracts with minors are voidable at the discretion of the minor party Exceptions Contracts for necessities Contracts for business purposes If a contract has been ratified (minor turns 18 during term of contract) Fraud on the part of the minor
7. What makes a valid offer Serious Intent – Must intend to enter a contract with someone Ads are not offers, they are invitations to make an offer Definite and Certain Specific with regards to terms and conditions Communicated to the Offeree Person to whom the offer is intended receives the offer
8. How to terminate an offer Revocation – take back the offer before it is accepted Rejection – the offeree rejects the offer Counter Offer – roles are reversed and the offeree becomes the offeror Time Expires – if a time limit is specified for an offer to be accepted. Death or insanity of the offeror– if offeror dies or is declared insane before acceptance, then offer is terminated
9. Acceptance Mirror image rule – must accept the offer exactly as it is made or it becomes a counter offer. Acceptance can be shown in multiple forms Saying yes, I accept Signing an agreement Performing / upholding you part of the contract
10. Mutual Agreement If the offer is accepted then usually there is mutual agreement between the parties. How do mistakes affect mutual agreement Unilateral mistakes – one party makes a mistake Can’t cancel the contract Bilateral mistakes – Both parties make a mistake. Either party can usually cancel
11. Other problems with mutual agreement Fraud – deliberate misstatement of facts by on party Party who was defrauded can cancel contract and sue for punitive damages Innocent Misrepresentation – innocent mistake by one party Party who was victim of mistake can cancel but can’t get damages Duress – when one party is forced to agree to a contract Contract is voidable Undue influence – one party has special influence over the other party – contract is voidable
12. Consideration Consideration for a contract can take 3 forms Giving up something of value Money, items Doing something you don’t have to do Giving your time at work Forbearance – giving up the right to do something you are allowed to due Ie – give up the right to sue someone in exchange for some kind of settlement
13. These aren’t consideration Promise to make a gift Promise to obey the law Preexisting duty – it is something you are already required to do Past Consideration Illusory Promise – looks like a promise but really isn’t Promise to attend a social function
14. How a contract ends Discharge by performance – everyone does what they are supposed to do Discharge by agreement – both parties can agree to cancel or adjust the contract Discharge by Impossibility of performance – property is destroyed, death of one of the parties. Discharge by operation of law – statute of limitations has expired, bankruptcy
15. Other contract facts Both parties must by legally competent to enter into a contract The rights of a contract can be assigned to someone else and the oligations can be delegated to unless it would change the nature of the contract. Promissory estoppel – courts will enforce a contract even without consideration.