1. Contracts BCS-LEB-4 The student identifies rights and responsibilities of contract negotiations. BCS-LEB-8 The student explains the legal rules that apply to personal property and real property.

2. Understanding Contracts Most people think a “contract” is a long, preprinted, formal document that they sign when buying a vehicle, renting an apartment, or purchasing insurance.. – However, all agreements are not contracts. Never enter into a contract without understanding the legal responsibilities involved..

3. Elements of a Contract ElementDescription 1..A proposal made by one party (the offeror) to another party (the offeree) indicating a willingness to enter a contract 2..The agreement of the offeree to be bound by the terms of the offer 3.A valid offer that is met by a valid acceptance 4..The exchange of things of value. The mutual exchange binds the parties together. 5..The legal ability to enter a contract 6..Parties are not allowed to enter contracts to commit illegal acts.. In writing is NOT an element. These elements are the actions and words courts use to determine if a “meeting of the mind” occurred during a contractual dispute.

4. OFFER and Acceptance An offer has three basic requirements: 1.with the intention of entering into a legal obligation, not in the heat of anger or as a joke 2.. Courts can’t enforce a contract with ambiguous wording. 3.via phone, fax, letter, email, telegram, etc.. – If a store has sold out of the advertised product, the sale rep will reject the customer’s offer to buy because the store no longer has product in stock.. – Buyers have to be able to walk away from estimates or price quotes

5. Offer and ACCEPTANCE Basic requirements of acceptance: 1.that does not change the terms of the offer in any way -- Mirror Image Rule The UCC set two exceptions to the mirror image rule: 1) contracts for the sale of goods such as personal property involving a non-merchant and 2) the sale of goods between merchants. Any change in the terms of the offer means the offeree has not really accepted the offer but has made a counteroffer. 2.by performing an action, using the same or a faster means than that used by the offeror, or using past practices used by the parties. A contract is formed at the time of acceptance. Common law says an acceptance that must be sent over long distances is effective when it is sent.

6. Termination of an Offer Even the an offer has been property communicated to the offeree, it may be terminated in any of the following five ways: 1.– taking back of an offer by the offeror. – If the offeror has a change of mind or circumstances or the contracted object is destroyed, the offeror can decides to communicate the withdrawal of the offer before it has been accepted. 2.– refusal of an offer by the offeree brings the offer to an end 3.– ends the first offer and a new offer is made 4.– If the offeror sets a time limit for the acceptance of the offer, it must be honored – If no time for acceptance is stated in the offer, it must be accepted within a reasonable time. Otherwise no contract exists. 5.– if the offeror dies or becomes insane before the offer is accepted, the offer comes to an end. – Death ends an offer, not a contract.

7. Firm Offer A firm offer, made between two merchants, is an offer that

8. Characteristics of a Contract Contracts can be created in different ways and can assume diverse forms. A contract can be described by any of the following characteristics:

9. Valid, Void, Voidable, or Unenforceable The word valid means legally good,. A contract that is void., it is a voidable contract. – A contract between two minors is voidable. An unenforceable contract – If you wait too long to bring a lawsuit for a breach of contract, the statute of limitations or limit period a contract can be legally enforced may have passed which would make the contract unenforceable.

10. Express or Implied Express Contract An express contract Implied Contract An implied contract – People often enter into implied contracts without exchanging a single word.

11. Bilateral or Unilateral Bilateral Contract A bilateral contract contains two promises. – For example: If a friend says, “I’ll sell you my DVD player for $150,” and you say, “I’ll buy it,” a bilateral contract is created. Unilateral Contract A unilateral contract contains. – For example: If a friend says, “I’ll sell you my DVD player for $150 if you give me the cash before noon tomorrow,” s/he will not be required to keep the promise unless you hand over the cash before noon on the following day. A reward offer.

12. Oral or Written Oral An oral contract – One person usually offers to do something, and the other party agrees to do something else in return. Most contracts are oral contracts of this nature. Written A written contract assures. The Statute of Frauds law requires that certain contracts must be in writing to be enforceable. – For example, a prenuptial agreement must be in writing.