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MGMT 217 INTRODUCTION: IN GENERAL, THERE ARE FOUR REQUIREMENTS FOR A CONTRACT: 1. MUTUAL CONSENT GENERALLY EVIDENCED BY AN OFFER AND AN ACCEPTANCE; 2. CONSIDERATION; 3. TWO OR MORE PARTIES HAVING LEGAL CAPICITY TO ENTER INTO A CONTRACT; AND 4. AN OBJECT OF THE AGREEMENT THAT IS NOT PROHIBITED BY LAW. EXPRESS AND IMPLIED-IN-FACT CONTRACTS QUASI CONTRACTS MANIFESTATIONS OF ASSENT: GENERALLY EVIDENCED BY AN OFFER AND AN ACCEPTANCE OFFERS 1.
GENERAL RULE: AN OFFER IS DEFINED AS A COMMUNICATION WHICH GIVES THE RECIPIENT OF THE COMMUNICATION THE POWER TO CONCLUDE A CONTRACT BY ACCEPTING. THE BASIC TEST OF WHEN A COMMUNICATION AMOUNTS TO AN OFFER IS WHETHER THE RECIPIENT COULD REASONABLY BELIEVE THAT THE ONE COMMUNICATING INTENDED TO GIVE HIM THE POWER TO CONCLUDE A CONTRACT. WHETHER IT IS REASONABLE FOR THE RECIPIENT TO BELIEVE THAT AN OFFER HAS BEEN MADE IS DETERMINED FROM THE WORDS AND ACTIONS OF THE PERSON MAKING THE ALLEGED OFFER, AND THE CIRCUMSTANCES SURROUNDING THE MAKING OF THE COMMUNICATION. ALTHOUGH IT MAY BE DIFFICULT TO DETERMINE WHETHER AN OFFER EXISTS IN A PARTICULAR CASE, COURTS HAVE CONSIDERED THE FOLLOWING FACTORS IN MAKING THE DETERMINATION: 2. AQUOTE@ AND OFFERS. GENERALLY, THE USE OF THE TERM AQUOTE@ INDICATES THAT NO OFFER IS INTENDED, WHILE THE USE OF THE TERM AOFFER@ INDICATES THAT AN OFFER IS INTENDED.
AT THE SAME TIME THE TERM IS NOT DISPOSITIVE OF THE RESULT. 3. DEFINITENESS OF COMMUNICATION 4. INQUIRIES AND INVITATIONS FOR OFFERS 5. NUMBER OF OFFEREES 6. ADVERTISEMENTS 7. AUCTIONS: WITH OR WITHOUT RESERVE 8.
STATEMENTS MADE IN JEST OR ANGER Four theories for enforcing promises 1. promise is supported by consideration 2. reliance on the promise by the promisee 3. promise is in writing and Asealed@ (in those few states where a Area@ substitutes for consideration). 4.
unjust enrichment of a party Special Topics 1. Adequacy of consideration General rule: courts will not examine the adequacy of consideration; but see section 2 - 302 of the UCC which may render unconscionable contracts unenforceable; gross inadequacy may give rise to capacity considerations (i. e. , is the person sane? ); It is not necessary that the promise derive any benefit from the promisee or the act given as consideration. 2. Pre-existing duty A to B: AI will give you $ 100 if you promise not to assault my child. @ 3. Performance of similar duty 4.
Illusory promises A to B: AI promise to give you a practice exam if I feel like it. @ This is really no promise, and will not furnish good consideration for a return promise. A to B: AI promise to do X, but reserve the right to cancel at any time. @ 5. Nominal consideration A to B: AI convey all my property worth 400, 000 to you for $ 1. 00. @ Is this an attempt to disguise a gift as a contract. 6. Promissory estoppel; Restatement ' 90 A promise which the promise should reasonably expect to induce action or forbearance on the part of the promisee, and which does induce such action or forbearance, is binding if injustice can be avoided only by its enforcement. 7. Past consideration A to B: Abecause you have been such a good friend to me in the past, I promise to give you a Lexus next Christmas. @ A sees that B was in danger of being hit by a car and pushes B out of the way. Thankful, B says to A: Abecause of what you have done I promise to give you my cat Miles on Christmas day. @ Although there is authority to the contrary, the general view is that the contract described above is unenforceable.
Fraud v. Misrepresentation (as grounds for terminating a contract) misrepresentation of fact otherwise significant relied upon by promisee with intent or science Statute of Frauds (certain types of contracts, in order to be enforceable, must be either evidenced by a writing or be in writing) Mistake as grounds for terminating a contract mistake in judgment (unilateral) mutual mistake of fact (bilateral) Sherwood v. Walker, 66 Mich. 568 (1887) Capacity of the Parties to Contract In order for the parties to have a contract, the parties must have the legal capacity to incur at least voidable contractual duties. Incapacity arises from the following causes: (1) infancy B traditional rule: a natural person has the capacity to incur only voidable contractual duties until the beginning of the day before he reaches majority (18 in most states). If sued on a contract, the infant (minor) may defend on grounds of incapacity. Infants may avoid contracts for necessaries, but the law does require payment of the fair market value of those necessaries which are not returned. (2) mental illness B traditional rule: when person is under guardianship because of mental incapacity, contracts are void and thus unenforceable.
A person not under guardianship incurs only voidable contractual duties (3) intoxication B traditional rule: A person incurs only voidable contractual duties by entering into a transaction if the other party has reason to know that by reason of intoxication he is unable to understand the manner and nature of the transaction. Quasi-contractual theory is applicable for the fair value of any goods or services rendered. (4) guardianship (no capacity if under guardianship), and (5) corporate incapacity (traditionally, corporations had capacity to contract with regard to certain subject matters.
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Research essay sample on Voidable Contractual Duties Incurs Only Voidable Contractual Duties Promise
