Chapter 7. How Contracts Arise?

I. Elements of a contract – all required in order an agreement to be legally enforceable

Elements

1. offer and acceptance

2. genuine agreement

3. consideration

4. capacity

5. legality

Contract- an agreement between two parties or more than is enforceable by law

offer- a proposal by a party to another party to “enter” into a contract.

offerer- makes the offer

offeree- receive the offer

Requirements of an offer:

1. serious intent

2. definite and certain- specific

3. communicated to the offeree

acceptance: the willingness to go along with an offer according to all the terms.

unconditional acceptance: accepted without conditions upon it. also called an “mirror image rule”

II. characteristics of contracts

1. valid, void, voidable, uneforceable

2. express/implied

3. bilateral or unlateral

4. requirements of an offer

5. oral or written

Offer- a proposal made by one party (the offeror) to another party (the offeree) indicating a willingness to enter a contract

Acceptance- the agreement of the oferee to be bound by the terms of the offer

Genuine-agreement offere and acceptance go together to create genuine agreement, or a meeting of minds. agreeement can be destroyed by fraud, misrepresentation, mistake, duress, or undue influence

Consideration- is the thing of value promised to the other party in a contract in exchange for something else of value promised by the other party. this mutaul exchange binds the parties together.

Capacity- the law presumes that anyone entering a contract has the legal capicity to do so. Minors are generally excused from contractual responsibility, as are mentally incompetent and drugged or drunk individuals.

Legality- parties are not allowed

Terminating an offer

1.Revocation:to take back the offer before it is accepted

2.Rejection:offeree declines the offer

3.Counter-offer: to make amend original offer by the offeree

4.Expiration of time: when time for offer is stated, offer is terminated

5.Death/ insanity: the ability to contract

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