...Chapter 6 Overview and Formation of Contracts McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Written versus Oral Contracts n While the word “contract” is often used to describe a written document, many contracts are not in writing and yet are enforceable. 6-2 Bilateral Contracts versus Unilateral Contracts n A bilateral contract involves two promises and two performances. A unilateral contract involves one promise, followed by one performance, which then triggers a second performance. n 6-3 Express Contracts versus Implied Contracts versus Quasi-Contracts n An express contract is created when the parties have expressly agreed on the terms. An implied contract is one in which the agreement is reached by the parties actions. The law permits quasi-contracts to be enforceable where one party suffers losses as a result of another party’s unjust enrichment. n n 6-4 Valid versus Void Contracts n When a contract has the necessary elements, it is said to be a valid contract. Void contracts are agreements that have not been formed in conformance with the law from the outset of the agreement and, thus, cannot be enforced by either party. n 6-5 Voidable versus Unenforceable Contracts n An unenforceable contract is one that meets the elements required by law for an otherwise binding agreement, but is subject to a legal defense. Example-the statutory requirement...
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...particular exam that you will receive is assembled from an exam question pool, so that no two students in the course will take exactly the same exam. There are separate question pools for the 30 objective questions (multiple choice, multiple answer, and matching—worth 5 points each and broken down by TCO), and the 7 essay questions (worth 20 points each and broken down by topic). The essay questions are all located at the end of the exam, so be sure to allow approximately one-half of your time for the essay questions. The essay questions can each be answered in 1-2 paragraphs. To prepare for the exam, review the following materials from each week’s material 1. Re-read the “Lecture” page, including the examples. 2. Read the instructor’s “wrap-up” to the two threaded discussion questions. 3. Review your graded answers to the weekly chapter-end homework problems. 4. Review your graded quizzes (Weeks 1-7). The objective questions are drawn largely from weekly quiz questions and chapter-end homework questions. In reviewing weekly quiz and homework answers, make sure you understand why the correct answers are correct. Re-read the relevant page(s) in the text, if necessary. The essay questions are drawn from issues raised in the threaded discussions, chapter-end homework questions, and material in the weekly “lectures.” Specifically, review the following topics in order to prepare the essay questions you might receive: * TCO 1—Negligence. The elements of...
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...Paper 10 compulsory questions each worth 10 marks consisting of: • 7 factual questions (knowledge) • 3 scenario based questions (application). Exam approach – scenario based questions • Follow ISAC approach: Identify the legal issues State the relevant law Apply the law Conclude Core Areas of Syllabus • • • • Essential elements of the legal system The law of obligations Employment law The formation and constitution of business organisations Capital and the financing of companies Management, administration and regulation of companies Legal implications of companies in difficulty or in crisis Governance and ethical issues relating to business • • • • Chapter 1 The English legal system The English legal system • Criminal law vs Civil law The main English civil courts • • • • House of Lords Court of Appeal County Court High Court of Justice Other courts • • • • Magistrates’ Court Employment Appeal Tribunal European Court of Justice European Court of Human Rights Chapter 2 Sources of English law Sources of English Law Case law Common law Legislation Direct legislation Indirect legislation Equity Sources of English Law • Literal rule • Golden rule • Mischief rule Chapter 3 Human rights Human Rights Act 1998 Purpose Derogation Human Rights Act 1998 Convention law Incompatible with convention Chapter 4 Formation of contracts Definition of contract A valid contract is a legally binding...
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...understanding. Research up to this point has suggested that integrative bargaining is desirable due to the increasing the pie rationale. The contention set forth in this paper is that there are alternative factors driving integrative bargaining. Exploration of this theory begins with an analysis of whether integrative bargaining is driven by the interjection of equity principals into what was traditionally a law driven enterprise, that of negotiation. It is argued that the stability of contract which results from an earlier application of equitable principals in the negotiating process is just as crucial to integrative bargaining as the desire to increase the pie. With this conclusion, it becomes apparent that solutions which encourage integrative bargaining will result in more stable contracts. The increased stability rationale holds true even where there is no increase in the fixed sum negotiation. Integrative bargaining is thus shown to be desirable in all cases. To encourage the stability of contract, this paper concludes with the suggestions that mandatory disclosure laws be adopted to help encourage the use of...
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...Tutorial 3 question 7 The company was incorporated on 1st May. On 10th June the company commenced business whereby the company’s directors, on behalf of the company, purchased the shop from Jacob. Advise the directors the legal position of the company. In Malaysia the law allows a company to ratify a contract entered before its incorporation. Section 35(1) states that any contract entered into by a company prior to its formation or by any person on behalf of the company prior to its formation may be ratified by the company after its incorporation. In the case above, the contract between the company and Jacob may be ratified. Once the contract is ratified, it is binding on the company and the company is entitled to the contract. In the event that the company does not ratify the contract, section 35(2) states that the person who purported to act in the name or on behalf of the company shall be personally bound by the contract and entitled to the benefits of the contract. In the case, if the company ratified the contract of Jacob, the directors of the company who commenced business on the behalf of the company, purchased the shop from Jacob, the directors could be personally liable. The directors can avoid the liability if there is an express exclusion or disclaimer clause in the pre-incorporation contract. A private company can commerce business immediately upon receiving the certificate of incorporation. However, a public company has to comply with the provision of section...
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...Module Handbook Unit 5: Aspects of Contract and Negligence for Business Unit code: Y/601/0563 QCF level: 4 Credit value: 15 credits Module Tutor: Anila Mushtaq Contact Details: anila.mushtaq@yahoo.co.uk Preferred style of contact: In the first instance, if you have any queries regarding the teaching or assessment for this module, please ask question during the lecture. If you do not receive a satisfactory response then e-mail me with your query for an appointment. Introduction: The aim of this unit is to provide learners with an understanding of aspects of the law of contract and tort and the skill to apply them, particularly in business situations. Unit abstract: The unit introduces the law of contract, with a particular emphasis on the formation and operation of business contracts. Learners are encouraged to explore the content of these agreements and then develop skills relating to the practical application of business contracts, including offer, acceptance, intention, consideration and capacity. Relevant case law examples will be covered. Learners will consider when liability in contract arises, the nature of the obligations on both sides of the contract, and the availability of remedies when a contract is not fulfilled in accordance with its terms. Additionally, the unit will enable learners to understand how the law of tort differs from the law of contract and examine issues of liability in negligence...
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...Part A - Four step process Question 1. Identify the legal issue of law As the elements of intention and consideration required for the formation of a contract exist, the main legal issue is whether the element of agreement required for the formation of a contract can be established and whether Chickens Galore obliged to provide Christian and Brian each with a Mazda CX-9. Explain the rule(s) of law identified in step one with reference to relevant authority Both offer and acceptance should be included in the elements of an agreement in order to meet the requirements for the formation of a contract. An element of promissory of giving or doing something that has real value. In Placer Development Ltd v Commonwealth (1969) 121 CLR 353 case, the Commonwealth government said to pay a subsidy to companies that imported timber products into Australia but after some initial payments, they stopped. The issue is whether the subsidy load considered as a legal enforceable promise, which is later decided by the court that it is not. This is called illusory promises in which the amount is not yet to be stated (Lambiris 2012, 248). Advertisement is accounted as an offer in Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 case, where Carbolic Smoke Ball Company offered a reward of £100 to whom purchased their products and used them properly but nevertheless caught influenza. Carlill had bought the product, used it as instructed after seeing the advertisement and eventually caught influenza...
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...Business Law 1 Week 4 Seminar Questions Natasha Dunn, Forensic Investigation Q1) This issue is governed under the Law of Contract, under the formation of contract and the revocation of a contract specifically under contractual capacity. Contractual capacity states that young persons aged sixteen and seventeen have full legal capacity. This protects young persons against ‘prejudicial transactions’ until they turn 18 and any contracts like this can be put aside by the court. However, there are exceptions to the rule: if under 18 and running your own business; if ratified before turning 18; if age is misrepresented when entering contract. In this case, Jean is seventeen, running her own business and wants to get out of a legally bounding contract for an object in which has already been ordered. However, Jean cannot get out of the contract just because she is under eighteen years of age because she is running her own business and therefore she is not subject to the protection anymore. Therefore, this puts her in the same legal position that any other adult would be in, in her situation. She could attempt to revoke the offer by emailing or writing to the seller but she is still legally bound by the contract made. Q2) This issue is governed under the Law of Contract, under the formation of contract and specifically contractual capacity. Contractual capacity states that generally children under sixteen years of age have no capacity and the contract is void. However, the exception...
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...PRE-EXAM PRACTICE QUESTIONS The following problem questions are from previous exams. Note what is said about Common Errors to Avoid for each of the 4 questions. The first question is the least challenging (it was weighted accordingly). The questions are not in any particular order. SAMPLE 1 Krishnah wanted to purchase a motor cycle. She applied to Pino Motors Pty Ltd (“Pino’s”) who specialised in Forum motor cycles. Krishnah informed the dealer, Zvonko, that she wanted a motor cycle which was capable of high speed and suitable for regular use in motor cycle race meetings. Zvonko recommended a Mark IV Forum motor cycle to satisfy these requirements and showed Krishnah a demonstration model in the showroom. Before placing an order and signing a written contract for a "Mark IV Forum motor cycle”, Krishnah again asked Zvonko whether this particular bike was suited for racing. Zvonko assured her it was and many racing people used this type of bike. She also asked whether these particular bikes would “hold their value, relative to most other bikes”. Zvonko responded saying, “yes, I can almost guarantee they do, based on what I have read about them in some of the industry magazines”. The contract Krishnah signed contained the term, “The parties acknowledge that this contract contains the whole agreement and that no other statements whatever induced the sale.” When Krishnah took delivery of the motor cycle, she discovered that the acceleration was slow and after testing it before and...
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...Amman Arab University for Graduate Studies-Jordan. Mr. Hisham Tahat PHD student, University of Aberdeen Abstract: This article examines the application of the postal acceptance rule to email acceptances. Different views have been argued against the application of traditional rule like the postal acceptance rule, which was established in 1818 as a legal norm in contract formation to modern communications like the email. The paper presents the arguments and rationale behind the application of this rule and contends its applicability to the modern communication via e-mail. The paper posits that email is not an instantaneous method of communication, but can be viewed as a digital version of the normal post and thus the postal acceptance rule should apply to this kind of contracting. Keywords: E-commerce, Email, Contract law, Conclusion of Contract, Postal Acceptance Rule. 1. Introduction The conclusion of distance contracts has been one of the controversial issues in the law of contract formation. It raises some question marks, especially with regard to the type of rules that should govern the timing of contract formation. More specifically, a strong debate has been emerged recently as to whether the postal acceptance rule may apply in respect to contracting through email. This paper is then divided into two main parts. The first one examines the justifications of the postal acceptance rule, while the second part analyses thoroughly the application of postal acceptance rules to...
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...Amman Arab University for Graduate Studies-Jordan. Mr. Hisham Tahat PHD student, University of Aberdeen Abstract: This article examines the application of the postal acceptance rule to email acceptances. Different views have been argued against the application of traditional rule like the postal acceptance rule, which was established in 1818 as a legal norm in contract formation to modern communications like the email. The paper presents the arguments and rationale behind the application of this rule and contends its applicability to the modern communication via e-mail. The paper posits that email is not an instantaneous method of communication, but can be viewed as a digital version of the normal post and thus the postal acceptance rule should apply to this kind of contracting. Keywords: E-commerce, Email, Contract law, Conclusion of Contract, Postal Acceptance Rule. 1. Introduction The conclusion of distance contracts has been one of the controversial issues in the law of contract formation. It raises some question marks, especially with regard to the type of rules that should govern the timing of contract formation. More specifically, a strong debate has been emerged recently as to whether the postal acceptance rule may apply in respect to contracting through email. This paper is then divided into two main parts. The first one examines the justifications of the postal acceptance rule, while the second part analyses thoroughly the application of postal acceptance rules to...
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...Assignment on: Aspect of Contract Executive summary For our everyday purpose, we have to meet with different category people. Due to the blessings of globalization, now, we people have been able to communicate with people from outside of our country. Globalization system has made it easy for us to express our needs and demand to outside of the world and get the best solution. All these developments have made our business world faster than ever and this trend is still going on. But to take any sort of massive or minor project, we have to sit with many different parties and make lawful agreement with them so that one party can demand for their legal right if necessary. This assignment has been designed completely on aspects of contract. How a contract can be formed and what are the necessary elements for the formation of a contract have been comprehensively explained here. Table of Contents Executive summary ii Introduction 1 01 Initial evaluation 1 1.1 Explanation of the importance of essential elements required for the formation of a valid contract 1 1.2 The impact of three methods in terms of forming and binding enforceable contract under the English Law. 2 02 Initial Business situations 4 2.1 Essential elements of a valid contract to advise Andrew 4 2.2 Law on contract terms to advise Cheltenham Champions Hotel on the claim of the guest 5 2.3 The effect of the contract terms to advise the downton hotel will be described in below 5 03 Further assessment...
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...Elements of a Contract Week 3 Assignment Bus: 670 Legal Environment Micah Blount Prof. Jennifer Stephens February 17, 2014 Introduction The goals of a contract are to ascertain the concord that the parties have prepared and to allot their privileges and responsibilities in accordance with that contract. The legal courts should implement a legitimate contract as it is created, unless there are basis that affect its enforcement. It is the purpose of the decree to promote the development of contracts between capable parties for legal rationales. As a universal statute, contracts by able parties, justifiably prepared, are compelling and enforceable. The provisions to which they have settled force persons to a contract. The purpose of this paper is to determine whether the contract in question is legally bidding. Many people call contracts “agreements”; however, I prefer the term contract, because it can mean one or more agreements within the contract. In contract, word “agreement” sounds as though only one agreement was made. A contract is formed when two or more persons or “parties” (hereafter party) agree to do, or to refrain from doing, something; and each party has some sort of stake in the outcome. In other words, one party cannot provide all the benefits while the other party provides nothing. For a valid contract to be formed that is enforceable by a court, each of the following criteria must be present: offer, acceptance, consideration, capacity, and legality...
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...Chapter 9 – Contract Formation Practical Internet Exercise 9-1: Legal Perspective—Contract Terms Instructions: Contract terms and conditions are a vital part of a contract because they detail the who, what, when, where, and how of an agreement between the parties involved. Since most contract disputes center on the terms and whether the parties voluntarily agreed to those terms, making sure you clearly state these details will save time and money in future business dealings. CyberText Consulting, technical writing and online documentation specialists, provides a sample contract on their Web site. Anyone interested in working for the company will need to agree to the contract terms and conditions outlined there. Read through the sample contract and then answer Questions 1–4. Visit URL: Contract Sample http://www.cybertext.com.au/contract_sample.pdf Questions and Answers Answer the following questions in the fields below. Question 1: Why do you think this contract spends so much space defining the certain subjects, such as “cybertext”, “technical writer”, and “third party”? Question 2: What obligations did the contract impose on each party? Question 3: Based on your knowledge of contract law, does this agreement meet all of the requirements for a valid contract? Why or why not? Question 4: Under what conditions might the employer terminate the contract with the independent contractors. Generally, do the terms of the contract seem fair? Practical...
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...ELEMENTS OF A CONTRACT AND ENFORCEABILITY UNDER COMMON LAW AND UNIVERSAL COMMERCIAL CODE (UCC) Student Name: Michael Shepard Course Name and Number: Business 670: Legal Environment of Business Instructor: Dr. Leah Westerman Submission Date: April 20, 2015 Abstract This article will define the five elements needed to form an enforceable contract under common law and the Uniform Commercial Code (UCC). It will describe which types of contracts come under common law and under UCC. It examines one hypothetical, non-competitive agreement between a Chef and an employer (namely, Fabulous Hotel) in terms of enforceability and whether common law or UCC need to be applied to the specific case. The contract in question requires Chef to not become employed at any other dining establishment in the same metropolitan area for a period of two years after separation of employment with Fabulous Hotel. The article shows under four possible conditions in which the contract may become unenforceable. It concludes with reinforcement of contractual elemental requirements and suggests more appropriate contract formation provisions in serving best interest of both parties under common law and UCC. Five Elements of a Contract The five elements needed to form a viable contract are: offer by one party to another or many, acceptance by the offered party, consideration (usually in the form of remunerative compensation for accepted offer) in exchange for accepted offer, legal capacity...
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