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CHAPTER 13: Introduction to Contracts CHAPTER 13: Introduction to Contracts
Four Elements of a Contract: CLAC 1. Contractual Capacity
2. Legal Object
3. Agreement (offer, acceptance)
4. Consideration
Contract -A promise or set of legally enforceable promises for the breach of which the law
gives a remedy or the performance of which the law in some way recognizes a duty.
Agreement (Offer & Acceptance)
Offer by Oferror to enter into a contract and acceptance of terms by offeree.
Consideration i. The bargained-for exchange or what each party gets in exchange for his or
her promise under the contract
(The something for something)
Contractual capacity i. The legal ability to enter into a binding agreement
Legal Object subject matter of the contract. Cannot be illegal or against public policy in
order to be enforceable
Objective Theory of Contracts is the basis of contract law
,Objective Theory of Contracts bases existence on Outward manifestations of intent
Objective Theory of Contracts bases interpretation on how a reasonable person would
interpret it.
________ of parties is not usually relevant under objective theory of contracts subjective
intent
t or f: subjective intent may be relevant under certain circumstances true
subjective intent may be relevant if a mutual misunderstanding b/t parties exists and they
did not come to a true meetings of minds; no contract exists
if there appears a a mutual misunderstanding look at each party separately, interpret
situation to determine whether parties really reached an agreement
in order to determine whether partied intended to enter into a contract, courts look at their
objective words and behavior and do not try to figure out what they may have secretly
intending
classification of contract determines when offeree is legally bound to perform
Bilateral Contract = A promise + a promise.
-I'll pay you $1000 for you to paint my car.
-(My promise = $1000)
-(Your promise = Paint my car)
-Mutual exchange
, Under bilateral contract, contract formed as soon as promise exchanged
Unilateral Contract -a promise + a requested action
-Offerror wants something *done, not a promise* for something to be done.
-ex; find dog and ill pay reward
under unilateral contract, contract formed once offerree begins performance; offeror must
give reasonable amt of time to finish before voiding contract
Express Contract The terms of the contract are all clearly set forth in either written or
spoken words.
ex; written agreement by dentist to perform work
Implied Contract Terms arise from conduct of the parties.
ex; dentist pulling tooth implies you will pay
3 conditions required for implied contracts (and recovery) 1- benefits conferred by plaintiff
upon defendant
2- defendant has knowledge of benefit being bestowed on them, and
3- defendant retains benefit under circs which it would be unjust to do so without payment
Void Contract -Not a contract at all; unenforceable
-Either illegal or has some serious defect.
Voidable Contract -One or both of the parties has the ability to either withdraw from the
contract or enforce it.
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CHAPTER 13: Introduction to Contracts CHAPTER 13: Introduction to Contracts
Four Elements of a Contract: CLAC 1. Contractual Capacity
2. Legal Object
3. Agreement (offer, acceptance)
4. Consideration
Contract -A promise or set of legally enforceable promises for the breach of which the law
gives a remedy or the performance of which the law in some way recognizes a duty.
Agreement (Offer & Acceptance)
Offer by Oferror to enter into a contract and acceptance of terms by offeree.
Consideration i. The bargained-for exchange or what each party gets in exchange for his or
her promise under the contract
(The something for something)
Contractual capacity i. The legal ability to enter into a binding agreement
Legal Object subject matter of the contract. Cannot be illegal or against public policy in
order to be enforceable
Objective Theory of Contracts is the basis of contract law
,Objective Theory of Contracts bases existence on Outward manifestations of intent
Objective Theory of Contracts bases interpretation on how a reasonable person would
interpret it.
________ of parties is not usually relevant under objective theory of contracts subjective
intent
t or f: subjective intent may be relevant under certain circumstances true
subjective intent may be relevant if a mutual misunderstanding b/t parties exists and they
did not come to a true meetings of minds; no contract exists
if there appears a a mutual misunderstanding look at each party separately, interpret
situation to determine whether parties really reached an agreement
in order to determine whether partied intended to enter into a contract, courts look at their
objective words and behavior and do not try to figure out what they may have secretly
intending
classification of contract determines when offeree is legally bound to perform
Bilateral Contract = A promise + a promise.
-I'll pay you $1000 for you to paint my car.
-(My promise = $1000)
-(Your promise = Paint my car)
-Mutual exchange
, Under bilateral contract, contract formed as soon as promise exchanged
Unilateral Contract -a promise + a requested action
-Offerror wants something *done, not a promise* for something to be done.
-ex; find dog and ill pay reward
under unilateral contract, contract formed once offerree begins performance; offeror must
give reasonable amt of time to finish before voiding contract
Express Contract The terms of the contract are all clearly set forth in either written or
spoken words.
ex; written agreement by dentist to perform work
Implied Contract Terms arise from conduct of the parties.
ex; dentist pulling tooth implies you will pay
3 conditions required for implied contracts (and recovery) 1- benefits conferred by plaintiff
upon defendant
2- defendant has knowledge of benefit being bestowed on them, and
3- defendant retains benefit under circs which it would be unjust to do so without payment
Void Contract -Not a contract at all; unenforceable
-Either illegal or has some serious defect.
Voidable Contract -One or both of the parties has the ability to either withdraw from the
contract or enforce it.
