Chapter 5/6/7 - Contracts Flashcards
Contracts
agreements that are enforceable through the law, agreed upon by two/more parties with benefits to all
Contract vs. simple agreement
contracts are enforceable by law, simple agreements are not
Express vs implied terms
Express are the specific terms negotiated
Implied are terms applicable based on outside sources; other contracts, laws, etc.
Invitation to treat
anything that shows a willingness to conduct business, could even be an ad
Four requirements to form a contract
Offer
Acceptance
Consideration
Intention
Offer
a promise to enter into a contract, terms to be determined
Includes parties, price, and product
Acceptance
one of the parties must accept the offer made by the other; could be original or counteroffer
Intention
both parties must have the intention that the agreement can be enforceable through court
Often not applicable in social or domestic relationships
Ways to end an offer
Time limit
Is properly revoked
Offeror is no longer able to fulfil
Offer denied or countered
Acceptance
Consideration
obligations each party owes; both giving and receiving and benefits the receiving party
Option Agreements
contracts between potential buyer and seller where a fee gives the buyer first dibs on an item up to a certain date
Standard Form Contracts
contracts drafted by one party without any negotiation
Three things that enforce a contract
Legality
Capacity
Voluntariness
Legality
the purpose of the contract must be legal, specifically legal in the eyes of the court
Capacity
parties have an understanding of what they are getting into
Minors/vulnerable people do not have capacity
Voluntariness
recognizes that a contract should be voluntarily entered into by all parties under accurate representation
Non est Factum
defence for a contract to be void because:
The signer could not read it
The signer was not careless
The subject matter is completely different than believed
Misrepresentation
Fraudulent is a false statement deliberately made that influenced the acceptance
Innocent is a false statement made but believed to be true when made
Performance of Contracts
the completion of a party’s obligations under a contract to the reasonable satisfaction of the other
Breach
the failure of a party to uphold their end of the deal
Five ways to end a contract
Performance
Agreement
Frustration
Operation of law
Breach of Contract
Frustration
an unforeseen outside event that make a contract impossible to complete or drastically changes it from the original agreement
Neither party is at fault
Operation of Law
a law passed by the gov. may step in to end a contract
Indemnification
a promise by one party to bear the monetary costs for losses/damages incurred
