8.1 Chapter 8 Introduction to Contracts and Their Formation Contract © 2003 by West Legal Studies in Business/A Division of Thomson Learning

8.2 Sources of Commercial Law  Common law  Restatement of Contracts  Uniform Commercial Code Uniform Commercial Code  Civil law  Suppletory law  CISG CISG  UETA UETA

8.3 Types of Commercial Contracts Express and implied-in-fact Executory and executed Unilateral and bilateral Valid, void, voidable Unenforceable

8.4 E-Commerce Contracting Models  Information exchange model  Mutual assent model  Consideration model  Performance model Contract

8.5 Types of Online Contracts  Business-to-business (B2B)  Business-to-consumer (B2C)  Consumer-to-consumer (C2C)

8.6 Classification of Subject Matter  Goods  Tangible personal property  Records  Documents to effect communication for contracting purposes  Electronic records  Specific records created, generated, sent, communicated, received, or stored by electronic means

8.7 Concluding the Agreement 1.Mutual assent Parties must agree on terms 2.Form contracting Has effectively eliminated transaction costs of negotiation 3.Boilerplate Standardized terms that consumers have little power to change

8.8 Offers Proposal to contract Confers power of acceptance Made via oral, written or gestures Advertisements, catalogs and price lists are invitations to negotiate, not offers

8.9 Termination of Offers  Lapse of time  Passage of either reasonable or specified time  Revocations  Irrevocable offers, option contracts, firm offers  Rejection  Acceptance

8.10 Contract Formation under the UCC  Auctions  Online auctions  E-B2B exchanges  Shrink-wrap agreements  Click-wrap agreements

8.11 Electronic Data Interchange  EDI  Trading partner agreement  Model EDI Trading Partner Agreement

8.12 Terms of the Agreement  Mirror-image rule  Battle of the forms  Material terms  Highly material terms  Open terms  Gap-filling terms

8.13 Consideration  Tests for the presence of consideration  Legal detriments or legal benefits  Forbearance  Mutuality of obligation  Detriment to the promisee  Legal benefit of the promisor  Unenforceable promises  Illusory  Preexisting legal duty  Accord and satisfaction

8.14 Promises Enforceable Without Consideration  Promissory estoppel  Consideration not required  Can be enforced to provide justice  Charitable contributions  Charities take actions based on pledged contributions  Failure to make contributions harms the charity

8.15 Questions & Discussion