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CONTRACT LAW

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Slide 2 T HE B IG P ICTURE Criminal Law Civil Law The Legal System Tort Law Tort Law Contract Law Contract Law Consumer Law Consumer Law Employment Law Employment Law Slide 3 T ODAY S O BJECTIVES Identify the six elements of a contract. Explain the effects of a contract on a minor. Identify types of contracts. Analyze the need for contracts. Slide 4 How many of you are currently subject to a contractual agreement? What are some examples of contracts? Slide 5 P OTENTIAL C ONTRACTS Credit Card Grocery store club card Selling / buying something to a friend for money Movie rental store agreement College commitment or sports agreement Part-time jobs Email accounts, iTunes, etc. Slide 6 Slide 7 T HE N ATURE OF A C ONTRACT A contract is any agreement enforceable by law. Not all agreements are contracts. Slide 8 Six Elements of a Contract Slide 9 E LEMENTS OF A C ONTRACT Offer Acceptance Agreement Consideration Capacity Legality 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? Slide 10 O FFER 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 Slide 11 A CCEPTANCE Acknowledgement by the offeree (person receiving the offer) that the offer is accepted unconditionally Must be communicated to the offeror in a reasonable manner May be spoken, written, or by action Slide 12 G ENUINE A SSENT 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. Slide 13 Read each example and decide. Slide 14 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? Slide 15 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? Slide 16 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, ProAktiv, at a drug store and did not notify the company that she planned on taking them up on their offer. Does the ProAktiv have to pay Jenny double her money back if the product does not work? Slide 17 Slide 18 C APACITY Legal ability to enter a contract Contracts can be disaffirmed by: Minors People with mental impairments People under the influence Slide 19 C ONSIDERATION Consideration is what is exchanged as a result of the contract. May be money, property, or services Slide 20 L EGALITY 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. Slide 21 Slide 22 Y AHOO ! Who is the offeror? The offeree? What is the offer? What is being offered? Key terms? How does a user accept? When does acceptance bind the user? What is the consideration for each party? Identify any other interesting parts of the contract. Slide 23 What kinds of contracts are recognized by law? Slide 24 T HE L AW R ECOGNIZES Express Contracts written or spoken Implied Contracts comes from the actions of the parties Executory Contracts not fully performed Executed Contracts completed by both parties Quasi-Contracts missing an element, still enforceable Sales Contracts sale of property, rent, wills, estates Employment Contracts business organizations Slide 25 Bilateral contracts contract that contains two promises. Unilateral contracts Contract that contains a promise by only one person to do something, if and when the other party performs some act. Example: Reward Mirror Image rule terms stated in the acceptance must exactly mirror or match the terms of the offer. Slide 26 T ERMINATION OF AN O FFER Revocation the taking back of an offer by the offeror. Rejection is a refusal of an offer by the offeree that brings the offer to an end Expiration of Time if the offeror sets a time limit of the offer, it must be honored. Counteroffer is a response to an offer in which the terms of the original offer are changed. Slide 27 T ERMINATION OF AN O FFER Death or Insanity If the offeror dies or becomes insane before the offer is accepted, the offer comes to an end. Although death ends an offer, it does not end a contract, except for contracts related to personal services. Slide 28 Slide 29 W E NEED CONTRACTS Because they are important in a free- market 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 Slide 30 Slide 31 L AST C LASS Identify the six elements of a contract. Explain the effects of a contract on a minor. Identify types of contracts. Analyze the need for contracts. Slide 32 T ODAY S O BJECTIVES Analyze agreements to determine if a valid contract exists. Determine when a breach of contract occurs. Identify defenses to contractual agreements. Apply contract law to negotiation deals. Slide 33 Slide 34 B REACHING A C ONTRACT If one party does not follow through with consideration in a contract, the other party doesnt have to perform. Failure to perform is called a breach. Slide 35 What happens when one party breaches a contract? Slide 36 E NFORCEMENT Damages the party who is harmed can request money (equal to the amount lost from the breach) from the other party Specific Performance if it is still possible to perform the contract, the court can require the party to perform Slide 37 Sam burned his hand on the stove. The burn was so bad that it permanently scarred his hand and made it difficult to grip things. A doctor told him that he could fix his hand with a simple skin-grafting procedure for $1200. After the surgery, Sams hand worked perfectly but, he started growing hair out of the palm of his hand. He tried waxing it, but he couldnt stop the hair from growing back. He decides to sue the doctor for giving him a hairy hand. Slide 38 Certain things can make contracts void, even though both parties agreed on the terms and there was valid consideration. Slide 39 U NCONSCIONABILITY If one party tricked another party into agreeing to an unfair contract, the court may not enforce it. Example: businesses who try to trick poor or uneducated clients Slide 40 F RAUD OR D URESS Lying or misrepresentin g something in negotiations Taking advantage of someone in a bad situation Slide 41 A LAW, THE S TATUTE OF F RAUDS Requires that certain contracts must be in writing to be enforceable. Contracts for Sale Contracts for Lease Contracts for a mortgage (real property) Contracts longer than 1 year Collateral contracts Prenuptial agreements Contracts for sale of goods valued at $500 or more Slide 42 E XPLAIN THE IMPACT OF The Uniform Commercial Code on interstate commerce Makes it easier to do business Eliminates the need for the involvement of lawyers with regard to the various aspects of interstate business.