Business Law: Contracts - Chapter 8

Introduction

• Instructor: Demetrius Wilson
• Focus of Chapter 8: Nature, classification, agreement, and consideration in contracts.
• Learning Objectives:
  • Definition and objectives of a contract.
  • Elements necessary for a valid contract.
  • Types of contracts (e.g., shrink-wrap, click-on agreements).
  • Consideration and its legal sufficiency.

Sources and Function of Contract Law

• Governed primarily by common law, except when modified by statutes like the Uniform Commercial Code (UCC).
• Contracts are fundamental to business operations, providing stability and predictability.
• Parties involved:
  • Promisor: The person making a promise.
  • Promisee: The person accepting the promise.

Requirements of a Valid Contract

1. Agreement: Offer and acceptance.
2. Consideration: Legally sufficient value exchanged.
3. Capacity: Parties must have the mental ability and be of legal age.
4. Legality: Subject matter must be legal.

Types of Contracts

• Bilateral Contracts: Promise for a promise.
• Unilateral Contracts: Promise for an act.
• Formal Contracts: Require special form or method.
• Informal Contracts: No special form needed.
• Express Contracts: Terms are stated in words.
• Implied Contracts: Formed by actions of parties.

Contract Performance

• Executed: Fully performed by both sides.
• Executory: Not fully performed by one or both sides.

Enforceability

• Valid Contract: Has all necessary elements.
• Voidable Contract: Can be legally avoided or rescinded.
• Unenforceable Contract: Cannot be enforced due to legal defenses.
• Void Contract: No contract or lacks legal obligations.

Special Contract Types

• Quasi-Contracts: Imposed by courts to avoid unjust enrichment.

Offer and Acceptance

• Offer: Must have serious intention, definite terms, and communication.
• Acceptance: Must be voluntary and show assent to terms.
  • Mirror Image Rule: Acceptance must match the offer exactly.
  • Mailbox Rule: Acceptance is effective upon dispatch.

Termination of Offers

• By Parties: Revocation, rejection, counteroffers.
• By Law: Lapse of time, destruction of subject matter, death or incompetence, supervening illegality.

Agreements in the Digital Age

• Online offers should include specific terms like payment methods, privacy policies, etc.
• E-Signatures: Governed by the Electronic Signatures in Global and National Commerce Act (E-SIGN) and Uniform Electronic Transactions Act (UETA).

Consideration

• Elements: Legally sufficient value and bargain-for exchange.
• Issues: Pre-existing duty, past consideration, and illusory promises.

Settlement of Claims

• Accord and Satisfaction: Agreement on a lesser amount.
• Release: Forfeiting the right to pursue further legal claims.
• Promissory Estoppel: Prevents revocation of a promise when reliance has occurred.

Case Studies

• Suggested cases to review: Case 8.1 and Case 8.2, focusing on contract performance and enforceability.

Conclusion

• Students should review PowerPoint slides, complete the quiz, and watch supplemental videos for full understanding.
• Encouragement for the upcoming week.