1518 Contract Formation Principles Flashcards
What is Mutual Assent?
Meeting of the Minds.
What is Capacity?
Ability to enter into a contract. Over 19 years old?, US citizen?, Registered w/ SoS if incorporated?
What is Consideration?
The bargained for legal value of the deal. Can be Money, Goods or Services. Can be exchange of promises. Can be either a benefit or a detriment.
What are the 3 types of authority?
Express, Implied, Apparent
What is Express Authority?
- Contracting Officer authority through formal appointment
- Authority is limited
- Appointed on an SF 1402 (warrant)
- May delegate some duties
What is Implied Authority?
- Some authorized reps may have implied actual authority
* Inspectors may have this type of authority when they are authorized to accept/reject work
What is Apparent Authority?
- Describes a situation in which a principal leads a third party to believe that an agent has authority to bind the principal, even where the agent lacks the actual authority to bind the principal
- Apparent authority not recognized in Government
What is an unauthorized commitment?
An unauthorized commitment is an agreement that is not binding solely because the Government representative who made it lacked the authority to enter into that agreement on behalf of the Government. Must be “ratified”
What is a ratification?
Officially authorizing a commitment that was previous not valid due to the approving individual’s lack of authority to do so.
Does the government recognize apparent authority?
No
What are the 6 essential elements of a contract?
Competent parties – 1. Capacity, 2. Competence & 3.
Authority.
Mutual Assent – Meeting of the Minds.
Consideration – Must be Mutual, no piggy-backing of previous
contracts.
Lawful Purpose – Obey the FAR & Statutes, Anti-Deficiency.
Certainty of Terms –Price, Delivery schedule & Quantity.
Form provided by law
