1. Business Law Introduction to Contracts

2. Case Problem Rosalie invited an acquaintance, Jonathon, to her high school prom. Jonathon accepted the offer and eager to please Rosalie, spent lavishly preparing for the evening. He got a haircut, he purchased a new jacket, new shoes, and flowers. On the evening of the dance, Jonathon arrived at Rosalie’s house and found out that she had left for the evening. Jonathon is considering suing Rosalie for breach of contract to recover his expenses. Does he have a case?

3. Contract Law Enforceable promises Some promises do not have legal obligations, rather moral obligations Promisor and Promisee Contract law is useful to assure that the parties keep their promises; gives an innocent party a legal remedy

4. Basic Requirements of a Contract Offer: – A proposal made by the offeror to the offeree.

5. Basic Requirements of a Contract Acceptance: – The offeree freely agrees to be bound by the terms of an offer.

6. Basic Requirements of a Contract Legality: – Parties cannot enforce a contract that is illegal or deals with illegal activities.

7. Basic Requirements of a Contract Mutual Assent: – The valid offer and acceptance of the parties involved. – Both parties genuinely consent to the offer and acceptance

8. Basic Requirements of a Contract Capacity: – The parties involved have the legal ability to enter (understand) and make a contract. – Must be competent parties

9. Basic Requirements of a Contract Consideration: – The willful exchange of the promised – There is a value to the exchange

10. Defined Contract – An agreement that can be legally enforced by two or more parties exchanging promises Promise – A declaration that something either will or will not happen in the future

11. Bilateral versus Unilateral Contracts Two parties in a contract: – Offeror: the party who makes the offer – Offeree: the party to whom the offeror makes the offer – The acceptance of the offer by the offeree binds the contract – Example: Apartment rental

12. Bilateral versus Unilateral Contracts Bilateral contract – Contract that includes a promise in exchange for a promise – Binding agreement exists before either party has to perform what they promised – Example: You hire a painter to paint your home and agree to pay him $2500.

13. Bilateral versus Unilateral Contracts Unilateral contract – Contract that includes a promise to exchange for an act – No contract exists until the person to whom the offer was made decides to perform; if the person does not perform there are no legal consequences – Example: You see a sign for a lost dog with an award of $100 for his safe return. You do not find the dog.

14. Express vs. Implied Contracts Express Contract – An agreement in which the terms are fully and explicitly stated in words – Words can be oral or written – Example: You offer to sell your snowboard to a friend for $300 over a phone conversation; they agree to the offer

15. Express vs. Implied Contracts Implied: – It is implied based on the conduct/actions of the parties – Steps necessary for an implied contract The plaintiff furnished some service or property The plaintiff expects payment for that service or property—and it is known that payment was expected The defendant had a reasonable opportunity to refuse the services or property, but did not

16. Quasi Contract An obligation created by law—not a true contract Purpose is to prevent one party from being unjustly enriched at the expense of another