What is a Contract? Contract Law 101

Report
Today’s Agenda
Scholarships
Start Contract Unit (10 slides)
Assignment
1
Contracts 101:
Processes and Procedures
Processes & Procedures
Standards
BCS-LEB-4: The student identifies
rights and responsibilities of
contract negotiations.
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Essential Questions
What are the elements required to form a
contract?
What are the requirements of an offer?
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What is a Contract?
Contracts are agreements between two or
more parties that create obligations.
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Scenario: Juan & Susan
Juan and Susan talking afterschool
Juan: 16 on July 3
Susan: 17
Susan selling her car $2800
– Trying to buy new car
Juan agrees to buy the car on July 14
Is this a legally enforceable contract?
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What is a Contract?
An agreement between two
parties that creates an obligation
to perform (or not perform) a
particular duty.
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6 Requirements
•
•
•
•
•
•
An Offer and Acceptance
Genuine Assent
Legality
Consideration
Capacity
Writing*
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1. Offer and Acceptance
The party making the offer is the offeror.
The party accepting the offer is the
offeree.
2. Genuine Assent
No Deception
– Important Mistake
– Unfair pressure
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3. Legality
Must agree to legal activities
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4. Consideration
What the promisor demands and receives
in order to make his/her promise legal
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5. Capacity
Not crazy
Old enough
– 18 Normal Legal age
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6. Writing
**Some agreement must be placed in
writing.
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OFFER
Basis of a bargain
– If no valid then no contract
Intent must be present
Must be Communicated
Terms must be complete and definite
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An offer must…
• Intent must be present
• Jest
• Anger or Terror
• Preliminary Negotiations
• Social Agreements
An offer must…
• Complete and Definite
• Price
• Subject Matter
• Quantity
• Some states require more
• Be communicated to the offeree
Assignment
Read Pages 107-111
Answers question 1-9
Identify the 6 factors to determine a
contracts legality.
HOTS Heroes: Read problem 7. Should all
unethical act be illegal?
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Agenda
Bell Ringer
Standards
Assessment
19
Bell Ringer
What are the elements required to form a
contract?
What are the requirements of an offer?
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Assessment
Assessment
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Agenda
Scenario
Assignment
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Scenario1
Trenton and Ellenina were student in a class on
movie production. Knowing that the final movie
in the Alien Cheerleader trilogy was about to
come out, Trenton camped out overnight at the
theater. He bought 2 tickets, and asked Ellenina
to go with him. Ellenina agreed, To be able to
go, however, she had to call in sick to her
evening job as and tips. Nonetheless, she made
the call. When Trenton did not show up to get
her, she confronted him. He admitted he had
sold the tix to someone else for $50 each.
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Scenario 1
Should Ellenina be allowed to sue Trenton
for not taking her to the movie?
Would your answer change depending
upon whether or not Trenton knew
Ellenina would lose income by going?
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Answer
Social Contract
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Scenario 2
Diego, 16, contracted to sell his full drum
set to his classmate Martin, also 16, for
450. They concluded their contract with a
handshake in front of a couple friends.
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Scenario 3
Anchors Aweigh, a boat retailer, placed an
ad in a local newspaper announcing a sale
of 25-ft. cabin cruiser for 35,000 each.
When seven would-be buyers were
waiting for the business to open in order to
purchase a cruiser at a price, the owner of
Anchors Aweigh raised the price to
40,000.
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Capacity
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Scenario 4
Sarah was talking with four friends at the
entrance to their community college. When
a bell called them to class, she absent
mindedly left her bag behind. It contained
a pocket calculator, her driver’s license,
and other items of value only to her. After
class, she posted an ad on a student
bulletin board, offering $25.00 to whoever
returned the bag. Major, another student,
had not seen the advertisement but he
found the bag and returned it to Sarah.
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Scenario
Is Major legally entitled to the reward?
Is Sarah ethically obliged to give him the
reward? Ethically, should Major take the
reward?
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Missing communication
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Assignment
Edmodo
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An advertisement on television stated that
the first 4 people showing up dressed as
a leprechaun at the Pot o’ Gold car
dealership on St. Patrick’s Day would
receive 40% off the sticker price of any car
on the lot. Would this be considered an
invitation to negotiate or a legally
enforceable offer? Why?
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LEGAL ENFORCEABLE
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Which of the following is not an essential
element of a contract?
(a) offer and acceptance
(b) genuine dissent
(c) legality
(d) all of the above
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(b) genuine dissent
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If the offer that was accepted to form a
contract is invalid, the courts will not
enforce the contract. True or False?
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TRUE
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If an offer is made, it can be accepted by
anyone who learns of it. True or False
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FALSE
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In some case a person may be held to an
offer that she only intended as a joke. True
or False?
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TRUE
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All agreements must be in writing to be
enforceable in court. True or False?
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FALSE
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A newspaper ad that specified “first come,
first served out of our limited stock” would
be treated as an invitation to negotiate.
True or False.
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FALSE
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The owner of a small color TV set offers to
sell it to a neighbor for $75. As the
neighbor stands there thinking about the
offer, a bystander says, “That’s a bargain.
I’ll take it! Is there a contract between the
bystander and owner?
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THERE IS NO CONTRACT BC THE
OFFER WAS MOT MADE TO THE
BYSTANDER. THE BYSTANDER’S
STATEMENT WOULD INSTEAD BE
TREATED AS AN OFFER TO THE
OWNER TO BUY THE SET FOR $75.
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Bill was injured on the job and hospitalized
for several months. Without telling Bill, and
to prevent him from being cited by the city
during this period, Bill’s friend Todd
mowed Bill’s lawn weekly and fed and
watered his pets. When Bill returned
home from the hospital, he was shocked
at what Todd had done and said, “I’ll pay
you $500 for all the work you did.” Is this
an enforceable promise? Can Todd
demand more money?
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NO: NO AGREEMENT THAT FOSTERED
THE PROMISE. 2ND THE PROMISE WAS
GIVEN BY BILL IN AN EMOTIONAL
STATE
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After reviewing her application, the
Nationwide Credit Union notified Heidi that
she was qualified to borrow up to $10,000.
Nothing was specified as to the length of
the agreement, the rate of interest the
credit union would charge, or the terms of
repaying any loan. The credit union did
not make a loan of $8000 to Heidi when
she requested it four months later. Is the
credit union liable for breach of contract?
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NO: THE CREDIT UNION IS NOT LIABLE
BC NO CONTRACT AROSE. THE
AGREEMENT WAS MISSING
ESSENTIAL TERMS
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G Whiz Sports Shop published this
advertisement in the local newspaper:
“Congratulations to the winners of the Tour
de France! Now YOU TOO can be a
champ! Get an 18-speed Blue Lightning
bicycle for only $2,295—marked down
from $2,795, the manufacturer’s
suggested retail price. What a bargain!
Come and get it!” Baxter visited the
discount store the following day and said,
“I’ll take one of the Blue Lightning bikes in
stock and they’ve all been sold.” Was the
advertising an offer?
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NOT AN OFFER BC IT DID NOT
ADDRESS THE PROBLEM OF LIMITED
QTY
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