Contract Agreement Act enforceable by a court of
Contract Agreement Act enforceable by a court of law www. assignmentpoint. com
Introduction • Contracts are the basis of many daily activities. • A contract is made when a business buys or leases property, hires employees, purchases equipment, inventory or raw materials, sells products or services, or sells its own stock. and otherwise transfer property, services, and other rights. • Contracts form legal relationships and duties between parties • Not all promises are enforceable contracts. Contracts must meet the requirements of a contract to create an enforceable promise www. assignmentpoint. com
Contract • A contract is an agreement that is enforceable by a court of law. • A contract is defined as a legally enforceable promise or set of promises • “A promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes a duty. ” www. assignmentpoint. com
Elements of Contract Essential elements • Agreement, • Consideration, • Contractual Capacity • Legality( LAWFUL OBJECT ) Other Elements • Free Consent • Possibility • Certainty • Written www. assignmentpoint. com
Agreement 1. Agreement - There must be agreement between the parties. – This requires an offer by the offeror and an acceptance of the offer by the offeree. two parties must reach a common understanding or "meeting of the minds". Typically, the agreement is reached through a process of offer an acceptance. www. assignmentpoint. com
Consideration 2. Consideration -. Promises that are made without an exchange do not create enforceable contractual obligations • EXAMPLE: Your sister promises to loan you her car for Saturday evening for a night out. On Saturday evening she changes her mind and refuses to give you the keys. Can you successfully sue? www. assignmentpoint. com
Contractual Capacity 3. Contractual Capacity - The parties to a contract must have contractual capacity. Certain parties, such as persons adjudged to be insane, do not have contractual capacity • Allen, who is 17 years old and has a good paying job (as a computer consultant for a local business) agrees to buy a car from S's Used Car's for the sum of tk 2, 500. S gives Allen the keys and sends him home with the car. After thinking about it overnight, Allen changes his mind, returns the car to S's and refuses to pay. Can S successfully sue for breach of contract? www. assignmentpoint. com
4. Legality - the purpose of the contract must be one permitted by law. Contracts to accomplish illegal objects or contracts that are against public policy are void. • B offers to buy cocaine from Carl for the sum of $500. Carl agrees to sell and takes B's money, but fails to deliver the drugs. Can B successfully sue to get her money back? www. assignmentpoint. com
Free consent • Free consent or Genuineness of Assent – The consent of the parties to create a contract must be genuine. – There is no real consent if the consent is obtained by: • Duress • Undue influence • Fraud • Writing and Form – The law requires that certain contracts be in writing or in a certain form. – Failure of these contracts to be in writing or be in proper form may be raised against the enforcement of the contract. www. assignmentpoint. com
Types of contracts • • Express and Implied Contracts Bilateral and Unilateral Contracts Executory and Executed Contracts Valid, Voidable and Unenforceable Contracts, www. assignmentpoint. com
Classifications of Contracts (continued) Express Contract • An Express Contract is one created with words. The words may be written or spoken. the two parties explicitly state all important terms of their agreement. Implied-in-fact Contract • An Implied Contract results from the conduct of the parties that can be reasonably interpreted as creating a contract. May be words, conduct, gestures. the words and conduct indicate that the parties intended an agreement www. assignmentpoint. com
Classifications of Contracts Bilateral Contract • A contract entered into by way of exchange of promises of the parties. • A bilateral contract results from an offer that can be accepted by a promise of performance. The contract is formed at the time the promise is made, with performance to occur at some later point. • 2 promises • “A promise for a promise. ” Unilateral Contract • A unilateral contract is one where an offer is made that can only be accepted by performing a requested act. The unilateral contract involves an exchange of a promise for an act of performance • Only 1 promise, one party makes a promise that the other party can accept only by doing something. No contract is formed until the offeree performs the requested act • “A promise for an act. ” www. assignmentpoint. com
Unilateral and Bilateral Contract Dedra offers to pay Earl a $50 reward for finding and returning her lost dog. This is an offer for a unilateral contract because it can be accepted only by performance: locating and returning the dog. A contract is not created until the dog is found and returned. At that time a unilateral contract is formed and Dedra is obligated to pay the reward. If Earl does not find the dog, he is not liable and cannot be sued for breach of contract. Dedra may revoke the offer of a reward anytime before Earl begins to perform (starts looking for the dog). Dedra offers to pay Earl $50 if he agrees to spend all day tomorrow helping her search for her lost dog. Earl agrees. A bilateral contract is created when Earl agrees or promises to help. If Dedra finds the dog before tomorrow, she will still liable to pay Earl under their contract. Or, if Earl changes his mind and refuses to help, Dedra can sue him for breach of contract. www. assignmentpoint. com
Classifications of Contracts (continued) Executed Contract • when all parties have fulfilled their obligations. If you have fully performed, damages for the price of performance may be sought as a remedy • A contract that has been fully performed on both sides. • A completed contract. Executory Contract • when one or more parties has not fulfilled its obligations. performance remains due from either party or both parties • A contract that has not been fully performed by either or both sides. www. assignmentpoint. com
Classifications of Contracts (continued) Valid Contract • Contract that meets all of the essential elements to establish a contract. • Enforceable by at least one of the parties. • A valid Contract is one that is fully enforceable. Void Contract • A contract that has no legal effect. • Neither party is obligated to perform. Neither party can enforce the contract. • Contracts with an unlawful purpose are generally void www. assignmentpoint. com
Classifications of Contracts (continued) Voidable Contract • Contract where one or both parties have the option to avoid their contractual obligations. • Contracts where one of the parties is lacking in contractual capacity and contracts, which are induced by improper circumstances such as duress or misrepresentation, are generally voidable. Unenforceable Contract • An unenforceable contract is one where the four basic elements are present, but some other legal defense prevents enforcement of the contract. www. assignmentpoint. com
Classifications of Contracts (continued) Formal Contracts • Contracts that require a special form or method of creation. – – Contracts Under Seal Recognizances Negotiable Instruments Letters of Credit • A formal contact must be written, signed showing an intention to be a deed & witnessed Informal Contracts • No special form or method is required for their creation. • Fully enforceable and may be sued upon if breached. – Leases – Sales Contracts – Service Contracts www. assignmentpoint. com
Classifications of Contracts Objective Theory of Contracts • The intent to enter into an express or implied-in-fact contract is judged by the reasonable person standard. • The subjective intent of a party to enter into a contract is irrelevant. Quasi-Contracts (Implied-in-Law Contracts) • Allows a court to award monetary damages to a plaintiff for providing work or services to a defendant even though no actual contract existed between the parties. www. assignmentpoint. com
PERFORMANCE, BREACH, DISCHARGE OF CONTRACT DUTIES • PERFORMANCE- Full and complete performance of the duties under a contract results in the discharge of liability under that contract. • BREACH-A party who commits a minor breach of a contract is liable for damages caused by that breach, but is still entitled to the return performance from the other party. When a party commits a material breach, he is liable for damages and the other party is discharged from any obligation to perform. • DISCHARGE OF CONTRACT DUTIES Contractual duties may be discharged in a number of ways other than performance. Duties may be discharged as a result of an agreement. www. assignmentpoint. com
- Slides: 19