CONTRACT LAW Business Law TODAY IN BUSINESS LAW

CONTRACT LAW Business Law

TODAY IN BUSINESS LAW q q q Take 15 minutes to complete the Lawyer Webquest. Elements of a contract Contract assignment Shark tank? Next class: enforcing contracts

THE BIG PICTURE The Legal System Criminal Law Civil Law Tort Law Contract Law Consumer Law Employment Law

TODAY’S OBJECTIVES q Identify the six elements of a contract. q Explain the effects of a contract on a minor. q Identify types of contracts. q Analyze the need for contracts.

THINKER QUESTION How many of you are currently subject to a contractual agreement? What are some examples of contracts?

POTENTIAL CONTRACTS q q q q Credit Card Grocery store “club” card Selling / buying something for money Movie rental store agreement College commitment or sports agreement Part-time jobs Email accounts, i. Tunes, etc.

What is a Contract?

THE NATURE OF A CONTRACT q A contract is any agreement enforceable by law. q Not all agreements are contracts.

What makes a contract? Six Elements of a Contract

ELEMENTS OF A CONTRACT q q q Offer Acceptance Agreement Consideration Capacity Legality q q In order to have a legally enforceable contract, all six elements must be present. Do contracts have to be in writing to be enforceable by law?

OFFER q q Proposal to make a definite and certain deal with serious intent Must be communicated to another person Remains open until it is accepted, rejected, retracted, or expires Counter-offers can be made and close the original offer

ACCEPTANCE q q q Acknowledgement by the offeree (receiving) that the offer is accepted unconditionally Must be communicated to the offeror in a reasonable manner May be spoken, written, or by action

GENUINE ASSENT q q q Reached when a valid offer is met by a valid acceptance The offer and acceptance together create genuine assent. Genuine agreements cannot exist if there is fraud, misrepresentation, mistake, undue influence, etc.

Is it valid? Read each example and decide.

Jim negotiated a deal to re-roof his house with a carpenter. They did not sign a written agreement. The roofers showed up at the house on the agreed day, and another carpenter had already started work. Was there a contract?

Cheryl was fired from her job at the newspaper, and she sued because she thought there had been gender discrimination in her firing. Cheryl and the newspaper company agreed on the basic outline for a settlement, but before it was signed, she backed out and wanted to go to court. Should the settlement be binding?

An advertisement in a magazine promises, “Our product will clear up your acne or we will give you double your money back!” Jenny bought the product, Pro. Aktiv, at a drug store and did notify the company that she planned on taking them up on their offer. Does the Pro. Aktiv have to pay Jenny double her money back if the product does not work?

The Other Elements

CAPACITY q q Legal ability to enter a contract Contracts can be disaffirmed by: § Minors § People with mental impairments § People under the influence

CONSIDERATION Consideration is what is exchanged as a result of the contract. q May be money, property, or services q

LEGALITY q q q In general, a court will not help any party to an illegal contract. Neither party can enforce the agreement. Neither party can get help from the court.

Email Account Contracts

YAHOO! q q Who is the offeror? The offeree? What is the offer? § What q is being offered? Key terms? How does a user accept? § When q q does acceptance bind the user? What is the consideration for each party? Identify any other interesting parts of the contract.

Types of Contracts What kinds of contracts are recognized by law?

THE LAW RECOGNIZES… q q q Express– written or spoken Executory– not fully performed Executed– completed by both parties Quasi-Contracts – missing an element, still enforceable Sales–property, rent, wills, estates Employment– business

Why do we need contracts?

WE NEED CONTRACTS… q q q Because they are important in a freemarket economy Because verbal (handshake) agreements are in decline Because they have protective power Because the court can intervene & enforce Because of the litigious nature of society

CLOSING TASK 1) List the six elements of a contract. 2) Identify two reasons why a contract may not be valid. 3) Is it illegal to enter into a contract with a minor? Explain.