2The Big Picture The Legal System Criminal Law Civil Law Tort Law ContractLawConsumerLawEmploymentLaw
3Today’s Objectives 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.
4THINKER QUESTIONHow many of you are currently subject to a contractual agreement? What are some examples of contracts?
5Potential Contracts Credit Card Grocery store “club” card Selling / buying something to a friend for moneyMovie rental store agreementCollege commitment or sports agreementPart-time jobsaccounts, iTunes, etc.
9Elements of a Contract _______ __________ _________ ___________ In order to have a legally enforceable contract, all ____ elements must be present.Do contracts have to be in writing to be enforceable by law?
10Offer Proposal to make a ________ and certain deal with serious ______ Must be _________ to another personRemains open until it is _______, _________, _________, or __________________ can be made and close the original offerDefinite – identifies the basic obligation of the contract
11AcceptanceAcknowledgement by the ________ (person receiving the offer) that the offer is accepted _______________Must be ___________ to the offeror in a reasonable mannerMay be _______, ________, or by ________
12Genuine Assent 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.
14Jim negotiated a deal to re-roof his house with a carpenter 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?
15Cheryl 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?
16An 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?
18Capacity The _________ to enter a contract Contracts can be disaffirmed by:_________________________Minors can enter into a contract provided the other party is aware of the minor’s age. The law usually gives minors the right to disaffirm contracts.
19CapacityMinors can enter into a contract provided ____________________.The law usually gives minors the right to _________ contracts.
20ConsiderationConsideration is what is ______ as a result of the contract.May be ______, ________, or __________
21LegalityIn general, a court will not help any party to an _______ contract.Neither party can enforce the agreement.Neither party can get help from the court.
23Yahoo! 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.
24Types of ContractsWhat kinds of contracts are recognized by law?
25The Law Recognizes… _________________– written or spoken _____________– comes from the actions of the parties___________________– not fully performed_______________– completed by both parties______________ – missing an element, still enforceable____________– sale of property, rent, wills, estates________________– business organizations
26Types of Contracts _____________– contract that contains two promises. _____________– Contract that contains a promise by only one person to do something, if and when the other party performs some act. Example: Reward______________– terms stated in the acceptance must exactly mirror or match the terms of the offer.
27Termination of an Offer ___________ – the taking back of an offer by the offeror.__________ – is a refusal of an offer by the offeree that brings the offer to an end_____________ – if the offeror sets a time limit of the offer, it must be honored.____________ – is a response to an offer in which the terms of the original offer are changed.
28Termination of an Offer ____________ – If the offeror dies or becomes insane before the offer is accepted, the offer comes to an end. Although _____ ends an offer, it does not end a ________, except for contracts related to _____________.
30We need contracts…Because they are important in a _______________________________ (handshake) agreements are in declineBecause they have ______________Because the court can intervene & ____________Because of the ________ nature of society
32Last Class… 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.
33Today’s ObjectivesAnalyze 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.
35Breaching a ContractIf one party does not follow through with ___________ in a contract, the other party doesn’t have to perform.Failure to perform is called a ________.
36Thinker Question!What happens when one party breaches a contract?
37Enforcement__________ – the party who is harmed can request money (equal to the amount lost from the breach) from the other party________________ – if it is still possible to perform the contract, the court can require the party to perform
38Sam burned his hand on the stove 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, Sam’s hand worked perfectly… but, he started growing hair out of the palm of his hand. He tried waxing it, but he couldn’t stop the hair from growing back. He decides to sue the doctor for giving him a hairy hand.Did the doctor breach the contract? Should the court do something about it? If so, what should the court do?
39Defenses to ContractsCertain things can make contracts void, even though both parties agreed on the terms and there was valid consideration.
40________________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
41_______________ Lying or misrepresenting something in negotiations Taking advantage of someone in a bad situation
42A law, the Statute of Frauds Requires _____________________.______________________________________________________________________________________________________________________________
43Explain the impact ofThe Uniform Commercial Code on interstate commerce____________________________________________________.