hello class this is Demetrius Wilson then we were now on chapter 8 this is business law chapter 8 were discussing contracts of the nature classification agreement and consideration all that goes into contracts our learning objectives for the chapter what is a contract what is the objective of theory of contracts one of the four basic elements necessary to a valid contract like this along have to be a sane individual do they have to be a certain age and what elements are necessary for an effective author what are some examples of non offers how to shrink-wrapping click on agreements differ from other contracts you know you see this a lot in terms of shipping and also computers how have traditional laws been applied to these agreements and what is consideration of what is required for consideration to be actually legally sufficient now so a little overview about a contract law the source of contract law common law which governs all contracts except when they're modified by statute to where written law such as the UCC or the Uniform Commercial Code the function of contracts are fundamental to business most people don't go into business with other companies unless they have a binding contract creates rights and duties between different parties and provides stability and predictability we know that if we sign this contract I'm gonna get five thousand tomatoes and you're going to get $40,000 parties you have the promise sir or the person makes the promise and the promise see who the person who accepts the promise good faith in commercial agreements is always involved agreement that can be enforced in court that's a part of the definition of a contract if you don't have something that can be enforced in court it's kind of tough to win and file any type of damages formed by two or more parties that promise or and the promise see so remember I mean you can have a personal contract with yourself but it's not a contract that we're going to discuss in court failure to perform results in a breach and damage you know possibly requests for damages will be filed objectives there are contracts intent is interpreted by a reasonable person so remember a lot of these things and a court setting is what would a reasonable person think if I came into your tax office threw down a box of tax things and said I'll see you in two weeks while a reasonable person would think that I came in there wanted you to actually do my taxes our requirements of a valid contract so valid enforceable right remember enforceable like actually take the court contract includes agreement right I agreed with you consideration capacity right are you in a mental state of mind and legality I can't sue you for not you know sending the you know twenty pounds of marijuana you were supposed to send me because that's not legal defense to the enforceability of a contract so it must be genuineness of assent and also have a form so it knows always pictures like a thousand words you have the contract formation I will talk about bilateral contracts a promise for a promise a unilateral contract a promise for an act you know you know you talk about different things like I promise to paint your house and you promise to pay me right I promise I less Sam's a lottery because that's a good example you know I I promise that if you hit these numbers I will pay you you know out whatever the share amount of money is I have formal contract which which requires a special form of creation actually something specific that you need to sign an informal contract requires no special form of creation Express is actually formed by words we put words together to say hey this is what the contract will be implied in fact is like when I talked about putting down the actual all the documents for taxes and and saying I'll see you in two weeks that's implied so formed at least in part by the parties conduct so my conduct says that I want my taxes done so bilateral versus unilateral contracts so every contract has at least two parties to offer the promise or they'll free the promisee bilateral contracts now for ah free exchange promises to each other right so bilateral it's the same thing so they both exchange promise I promise you this you promise do that a contract is formed with all three promises to perform because it comes from the offer first and then all free has to accept a unilateral contract so offer once performance in exchange for forest promise the contract is formed when the offeree performs right so offer you know they they have performance in all free performance as well then the contract has been fulfilled and contest and lotteries are examples of unilateral contracts already gave that example a revocation of offers for unilateral contracts so the modern view is that the offer is irrevocable I want saw a free substantial of substantially perform so once they perform then it's no way to break the contract formal contracts they require special form or method to be enforceable so for example under seal informal all other contracts involved express versa implied contract so expressed terms of contract are set forth in writing or orally imply in fact is based on your conduct like I said about setting a shoebox full of documents down and hir block and saying I'll see you in two weeks of a plaintiff furnished service or product plaintiff expects to be compensated and the defendant had a chance to reject and did not and I want you to check out this case and you'll see that it's you know close related to your homework assignment case 8.1 your hand construction design Inc 1st Hopkins I also want you to definitely check that out and read that case contract performance executed vers execute or e so executed fully performed by both sides so I promise you this you promise to that and we both you know fulfill our promise or I promise through this and you had an act to perform but we've both fulfilled decides that we were on and execute or E is at least one of the parties has not performed so maybe both of us didn't perform maybe just I didn't perform maybe you didn't perform but in such instance somebody did perform a great picture again a valid contract so contractor has a necessary contractual elements agreement consideration legal capacity of the parties and legal purpose so from that valid contract you have an enforceable contract valid contract they can be enforced because there are no legal defenses against it right it's fully legal avoidable contractor the party has the option of avoiding or enforcing contractual obligation and unenforceable contract a contract exists but it cannot be enforced because of a legal defense right so legal defense you know takes precedent that won't work a void contract means basically no contract at all no contract exists or there's a contract without legal obligation a contract enforceability and that's the big thing you know can you enforce it in court and be paid valid contract has four elements agreement consideration legal purposes and the parties have to have legal capacity in a voidable contract value contract that is legally defective and can be avoided or rescinded by one of the parties right say you know it I don't like this other terms and rates of this or you know it's a usury I want to I want out and it's a easy for me to void an invoice contract is no contract at all because it's already voided there's nothing they can do from there a quasi contracts you'll see a lot of stories about this and give the example that they always say hey so my fault and they're in trouble and the doctor comes and fixes them up because you just have to be a doctor walking down the road they create a quasi-contract because the person should receive something for what they did because that's you know within their profession but it wasn't something that they had to do fictional created by a court to avoid unjust enrichment you know you fixed me up as a doctor's if I were going to Kaiser but it just happened to be I just you know fell out on the street in front of you limitations on quasi contractual recovery of course that needs to be put in place so that people just don't you know say we're gonna do all quasi contracts when an actual contract already exists quasi-contract cannot be used right so it actual contract supersedes that agreement requirements of the offer so an agreement consists of a valid offer and acceptance so I have to offer in you and you have to accept it I can't force you a pretender the restive accepted an offer is the offerors promise to perform the offeror says hey I'm gonna give this to you and I will perform you know get the contract I will perform by painting your house and offer requires serious objective intention right so you have to have an objective intention I'm gonna skip pass a case 8.2 Lucifer Zimmer I want you to look it up though and all four requires serious intention so expressions of opinions are not offers you know everybody's got an opinion these days statements of future intent or not offers preliminary negotiations are not offers advertisements catalog and circulars or not offers auctions are not offers an agreement to agree or not offer so you know told you everything I offer it is it's not an offer requires definitiveness right so reasonably definite terms so that a court can determine whether a breach has occurred and not given any appropriate remedy right so it has to be you know definite to get to that point a communication of the offer and offering always important to communicate now then we have termination of offer by act of the parties so revocation of the offer is possible if communicated to the offeree before the offer is accepted exception irrevocable offers so you can't revoke them based on detrimental reliance or promissory estoppel cannot be revoked like somebody's relying on you know what you're doing for life support and you say I'm only gonna do something else you know that you know that's that's a you know that's something in which they would step in and say they have detrimental reliance option contracts require consideration you can check out case 8.3 TLP Nickerson Inc versus Fleet National Bank I'll termination offer by active party so rejection of the offer by they're all free so I've offered to you I'm the offer you receive the offer is all free and then you reject my offer effective only when actually received by the offer or it's agent a a counteroffer by the offeree so you remember you know people say this is what I think and then other people say this well I think so it's a counteroffer it's not shutting anything off the table I but you do have rejection we all have to deal with that get the heisman every once in a while a rejection of original offer and simultaneous making new offer with different material terms so all four offer can accept I have a mirror image rule so the rule at common law material terms must be identical or it will be rejected as well lapse of time offer automatically terminates by law based on the term specified in the offer itself so you know a certain thing that they say hey you have 30 days or hey you have up until April 15 and this is what's gonna happen destruction of subject matter so offer automatically terminates if subject matter destroyed if subject matter destroyed before offer is accepted and death or incompetence of either party unless the offer is irrevocable she just stay away from that one uh-huh and supervening you like either you know illegality a proposed contract right so remember we talked about certain things being illegal if it's illegal then you know you can't enforce a contract so the statue or court decision making the offer illegal automatically terminates it so right off the bat the illegality of that is is first and foremost because you know you can't hold me binding for something that's illegal acceptance so the voluntary act by the offeree that shows assent to terms or original offer other of the actual original offer you have the mirror image rule that we discussed earlier I'll free must unequivocally accept the offer additional terms may be considered a counteroffer so you offer something I get a job offer and you say hey you know like the job offer or everything's good except for I want these three things added so silence says acceptance right so you know you get certain things that say if you click here then or right here then you have you know object or you reject it otherwise we're going to move you forward communication of acceptance so authorize means of community either express or implied a form or offer so u.s. mail fax email not too many people use fax anymore you probably take out fax and put in text the mailbox rule which is interesting all free accepts offer when the acceptance is dispatched to the offeror in the former was received so if you send something to me and the mail says you'll get this great credit card rate now it's put it in the mailbox it doesn't matter that it hasn't reached you once I put it in the mailbox and mail box in its dispatch then the contract is binding so offer or in the form that was received and less offer requires a different method and that's only if it requires a different method now there are of course exceptions so acceptance is not properly dispatch offer stipulates not accepted until received all three rejects then accepts first communication in every so it's kind of like the first in law first communication received determines whether the contract is formed or not you also have agreement in heat contracts we talked about that in shrink wrap agreement so online offers should include the following so remedies for buyers statute of limitations what constitutes buyers acceptance method of payment sellers refund and return policy disclaimers of liability house seller will use buyers information in terms of their privacy so these all should be should be going on and and they should be included in the online offering so provisions to include dispute settlement provisions Jagr choice of law choice of form eBay uses online dispute resolution you might use online or you may be a company that uses in-person alternative dispute resolution such as negotiation mediation and arbitration displaying the offer of your hyperlink and how will the offer be accepted amazon.com has a check out right so put these things on your qartheen checkout you have the I accept button up to click and go from there dispute settlement provisions you know you see here you know if you can see that and I'm sure you guys you know spend a lot of money online you know you have these things and they say Oh am ia robot and that's you know security functions and everything like that but you know you also have things that you know more simpler terms or simplify terms that you write your name your address your phone number your credit card number and a lot of times people don't think about what happens with that information after is anything protecting you but you know you should always think about that as well click on agreement so the buyer checks out or clicks on I accept a button on the seller's website or when their software is installed the shrink-wrap agreement right if you ever seen receive something a mail contract terms are inside the box partly opening the box agrees to the terms by keeping the merchandise and the limits when was contract when was actual contract form before after the terms communicated to the buyer so say oh you know we're just slide this in here but it wasn't in there before ie signatures technology's a symmetric cryptosystem cyber notary just different ways to get you to actually sign in you know do it on my iPad with your finger or with a traditional mouth the mouse you know with your laptop or and or desktop state law governing heat signatures there's a uniform electronic transmit transactions Act of 1999 once you guys check that one out federal law east side 2000 which is just following year gives thee signatures and he documents legal force a night at most ninety percent of time you go to Judge Judy and see people say hey you have everything on my phone here a uniform electronic transactions act so purposes you remove barriers to forming electronic commerce right so get those barriers out of the way ie that each signature is an electronic sound symbol or process associated with the record and adopted by a person with intent to sign of the record the you ETA or if you just look at the top the you e uniformed electronic ta transactions Act applies only to e records any signatures of relating to a transaction so you the you ETA and ESI so he signed explicitly refers to you ETA provide that provides that a sign is preempted by state passing you ETA but state law must conform to a minimum assign procedures right because some people say hey just you know ballpark at home but other people say you need two checks and balances they're a consideration as a value given in return for a promise so I promised to go to the game you know but you have to take into consideration what are you missing on the other end um elements so something of a legally sufficient value given in exchange for promise and that is a bargain for exchange between actual parties Oh adequacy of consideration Court should generally do not look for how much consideration is given just they just look for the fact that is consideration actually given contracts that lack consideration so pre-existing duty a promise to do what one has already legally obliged to do is not consideration unforeseen difficulties it could be a tornado I mean it could be anything in rescission and new contract past consideration a promise made in return for actions or events that have already taken place are unenforceable and we talked about that if it's something that should be illegal or even if it's unenforceable and we just didn't know the rules and regulations correctly still got to get it out of there illusory promises so if the terms of performance are so uncertain that if the promise sir has not legally promised anything the promise is illusory you know it's you know very loose in terms of you know the definitive nature of it option to cancel the actual clauses so settlement of claims so Accord and satisfaction so the debtor and the creditor agree on a lesser amount right so once you agree can't come back and ask for more you can but it's not the right thing to do and you want have a court on your side now release one of the parties for fits of the right to pursue legal claim versus against the other right so I'll say okay you know what we're good now you gave me ten thousand dollars I'm not going to pursue any type of claim from here covenant not to sue you also have those like there's a covenant that we're not going to sue the other party party substitute a contractual obligation for some other type of legal action typically they get paid a certain amount of money and we won't sue you because we know that when you get to the other company two years down the road then you're gonna take your client list with them so promissory stop all along those same lines detrimental reliance doctoring applies when a person relies on the promise of another to her legal detriment right let's see what if you have to go like a ballast or something like that place that closest the promise or is stopped or precluded from revoking the promise elements of promissory estoppel clear and definite a promise a promise or expected promise would rely promise see have reasonably relies by acting the reliance with definitive with definite and substantial detriment right so you know there's a detriment if you you know don't skip it enforcement of promise is necessary to avoid injustice and that will be it for the chapter so make sure that you guys you know have checked out a chapter this is also posted I mean just the PowerPoint in the module all you have a quiz and you also have your relative supplemental videos so that's it another week down and look forward to another great week and as always want you guys all to have a good day and a great week