3.  A contract is any agreement enforceable by law.  There are 3 theories behind contract law: 1. Equity Theory of Contract: whether parties to a contract exchanged things of equal value. 2. Theory of Contract Law: focuses on the exercise of each party’s free will. “Did the parties really agree to these terms?” 3. Formalist Theory: if the elements exist, the contract exists.

4. 1. Offer 2. Acceptance 3. Consideration 4. Genuine Agreement 5. Capacity 6. Legality

5. Proposal made by one party (the offeror) to another party (the offeree) indicating a willingness to enter a contract. Does the following example constitute an offer?  A person says to a friend "I offer to sell you my iPhone." This would not be sufficient to give rise to an offer to form a contract because it doesn't include any of the necessary details, such as price and other terms required in a legal sale transaction.

6.  Take 1 minute and make the previous proposal (with the iPhone) into a valid offer.  “I offer to sell you my brand new iPhone 5s for $200 and you must make a decision and provide the money to me by Saturday, December 27 th, 2014….and I will provide you with the phone by Thursday, January 1 st, 2015.”

7.  So….person X has paid or given whatever it is the above offer asked for (as rewritten by the class) and taken the iPhone.  Was this offer accepted?  Does it matter that the person never said “I accept?”  Acceptance is an acknowledgment by the person to whom an offer is made that the offer is accepted.  Must comply with the terms of the offer and be communicated to the person who proposed the deal.

8.  Usually what is being exchanged. It is what each party gives up in order for an agreement to be valid.  Consideration can be money, property, or services.  Was there consideration for the iPhone contract?

9. Offer & acceptance go together to create genuine agreement, or a meeting of the minds.  Agreement can be destroyed by: ▪ Fraud ▪ Misinterpretation ▪ Mistake ▪ Duress: actions that broke the law were only performed out of an immediate fear of injury ▪ Undue influence: involves one person taking advantage of a position of power over another person

10. Capacity: presumes that anyone entering a contract has the legal capacity to do so.  The only people whom are exempt from this are: ▪ Minors ▪ Mentally incompetent ▪ Drugged ▪ Drunk

11. Parties are not allowed to enforce contracts that involve illegal acts.  This includes any activity made illegal by statutory law such as: ▪ Crimes ▪ Torts

12. 1. Valid, void, voidable, or unenforceable. 2. Express or implied. 3. Bilateral or unilateral. 4. Oral or written.

13.  Voidable Contract: when a party to a contract is able to void or cancel a contract for some legal reason.  Unenforceable Contract: one the court will not uphold, generally because of some rule of the law, such as legality.

14.  Express Contract: stated in words and may be either oral or written.  Implied Contract: comes about from the actions of the parties, sometimes without exchanging a single word.

15.  Bilateral Contract: contains two promises. One party promises to do something in exchange for the other’s promise to do something else.  Unilateral Contract: contains a promise by only one person to do something.