2.  I can explain and identify all five elements of a valid contract.

3.  A legally binding agreement between two or more people.  Five Elements MUST be present in order for a contract to be valid.

4. 1. Eating at a restaurant 2. Hiring the 13 year old next door to baby-sit 3. Asking a girl to the prom 4. Getting married 5. A wager on a football game with your friend 6. Turning the heat on in your house 7. Taking a class at Harper 8. Buying a house 9. Friday night poker game Are these contracts?

5.  1. Offer & Acceptance – mutual assent A. Offer  Definite offer or proposal  Person placing the offer (the offeror) intended to be bound by it

6. B. Acceptance : ▪ Reasonable communication ▪ Cannot accept with silence ▪ Must come from the person to whom the offer was made (the offeree) ▪ Acceptance of material

7.  2. Competent Parties  May not be competent: ▪ Minor, there are exceptions! ▪ Not valid on necessities ▪ Cannot be voided after 18 years old ▪ Business owners are not considered minors ▪ Intoxicated ▪ Mentally impaired

8.  3. Legal purpose  No contracts for stolen/illegal goods  What if you didn’t know??  4. Consideration  Exchange of services: every contract must have consideration ▪ Benefit and detriment (gain or loss) ▪ What about Promises: are they enforceable? ▪ NO – no mutual gain/loss

9.  5. Proper Legal Form  Assumed  Oral  Written ▪ Over $500 ▪ Real Estate ▪ Debt ▪ More than one year to complete ▪ Marriage

10. 1. Eating at a restaurant YES 2. Hiring the 13 year old next door to baby-sit YES (for the adult only – voidable for the 13 year old) 3. Asking a girl to the prom YES??? (If both are 18) 4. Getting married YES 5. A wager on a football game with your friend NO 6. Turning the heat on in your house YES 7. Taking a class at Harper YES 8. Buying a house YES 9. Friday night poker game NO Are these contracts?

11.  They are only an intent to sell, not a legal offer!

12.  Age 18  Day before birthday  Age of majority binds prior contract  Marriage terminates minority status  Emancipated minor

13. DEFECTIVE AGREEMENTS Not Enforceable!  Misrepresentation (Fraud)  Selling something under false pretenses  intent to commit fraud  Undue Influence  Conniving relative  Concealment of vital facts  House was flooded at one time  Threat or force  Sign this contract or else……

14. 1. Unilateral: (one-sided)  CONTRACT IS VALID 2. Mutual Mistake: ( both parties made an error)  CONTRACT IS VOIDABLE!

15.  The consumer is protected by Federal law which provides uniform protection across state borders  RULES REGARDING CONTRACTS ARE THE SAME STATE TO STATE! Why???

16.  Must be 18 years of age or older  Dollar amount varies from state to state  You do not need a lawyer!