Law for Business

Mr. Bernstein

Contracts: Offer and Acceptance, pp 110-120

October 21-3, 2014

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Law for BusinessMr. Bernstein

ContractsA Private, Voluntary Agreement to Exchange Valuable

Things or PromisesAn Agreement in a Form Courts Will EnforceThe Basis for All Economic Activity

Without solid contract law, how would an economy operate?“Law of the Jungle”Risk Aversion by BusinessesLower Standard of Living (except for the King of the Jungle?)

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Law for BusinessMr. Bernstein

Requirements of an Enforceable Contract1) Offer and Acceptance – Serious, definite offer,

accepted in full2) Genuine Assent – Cannot be based on

deception, an important mistake, or unfair pressure

3) Legality – Items or services exchanged must be legal

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Law for BusinessMr. Bernstein

Requirements of an Enforceable Contract, cont.4) Consideration – Both parties must receive

something of value5) Capacity – Both parties must be legally able to

contract6) Writing – Some agreements must be in writing

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Law for BusinessMr. Bernstein

Legal Offer1) The offerer must appear to intend to create legal

obligation, using reasonable person standard2) Terms must be clear and complete3) Offer must be communicated to an intended

offeree

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Law for BusinessMr. Bernstein

Terminating an OfferOfferer can generally revoke anytimeTime period of offer can be statedIf no time period is stated, reasonable period of time

is used, specific to that industryRejection or counteroffer revokes initial offer – no

right to a “second look”

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Law for BusinessMr. Bernstein

Accepting an OfferMust be made by the party the offer was intended

to reachMust match the terms of the offer fullyMust be communicated to the offerer – generally

silence cannot constitute acceptanceUnilateral acceptance are accepted by performing

actions outlined in contract