A contract -is a legal agreement that occurs between two or more parties. It can be a written or spoken agreement that can concern employment, sales, or tenancy. Parties or members involved, enter voluntarily into this agreement. Every contracts involve two persons they are the: Offeror and Offeree. The offeror is the one who offers to enter into a contract and the Offeree is the one to whom the contract is being offered Elements of a contract: Agreement, Lawful object, consideration and contractual capacity.
The law requires that some contracts be written in a certain form Evolution of contract: Freedom of contract Form Contract Little government regulation Government regulation Face to face parties bargaining for equal power Unequal bargaining (Parties dealing at a distance) Types of contracts Bilateral contract- A promise for a promise Unilateral contract- A promise for an act Formal Contract- A special form of method or creation Informal contract- No special form or method required.
Valid contract- Meets all of the essential elements to establish a contract Void contract- Has no legal effect Voidable contract- 1 or both parties can avoid contractual obligations Unenforceable contract- Legal defense to the enforcement of the contract Executed contract- Fully performed on both sides Executory contract- not fully performed by either or both sides Express Contract- expressed in writing in verbally. Implied –in-Fact contract- Agreement inferred by parties conduct Implied-In-Law contract- No actual contract.
Objective theory of contract- Intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties. Express Term- The terms of an offer must be clear enough to the offeree to be able to decide whether to accept or reject the terms of the offer. Implied terms- The court can supply a missing term if a reasonable term can be implied. Communication- An offer cannot be accepted if it is not communicated to the offeree by the offeror or a representative or agent of the offeror.
Special offer situations: Advertisements, rewards, auction. Auctions: With reserved auction and auction without reserve. Without Reserved auction- Unless expressly stated otherwise, an auction is an auction with reserve, With Reserved auction- An auction in which the seller expressly gives up his or her right to withdraw the goods from sale and must accept the highest bid. Termination of Offer by Act of Parties: Revocation, Rejection, and Counteroffer.