Chapter 12: Nature and Classes of Contracts: Contracting on the Internet

1. Chapter 12: Nature and Classesof Contracts: Contracting on the Internet

2. Offer CONTRACT Acceptance Definition of Contract • A contract is a binding agreement between two or more parties. • A contract arises when an offer is accepted with contractual intent (the intent to make a binding agreement) and the acceptance is communicated properly.

3. } Parties This contract is executed between the Lookout Alarm system, herein called System, of 276 West Jackson Street, Phoenix, Arizona, and A.J. Armstrong, herein called Homeowner, of 737 Inwood Drive, Phoenix, Arizona Installation System agrees to install a burglar alarm system at the above address of the homeowner, in accordance with the specifications that are attached hereto. Payment Homeowner agrees to pay System for the above installation the sum of $4,863.00, $663.00 being paid upon execution of this contract and the balance of $4,200.00being paid within 90 days following satisfactory completion of the work by System. 1 } 2 } 3 4 A.J. ArmstrongA.J. Armstrong July 1, 2001Date Lookout Alarm System by S.J. McRory S.J. McRory, President July 1, 2001 Date 5 Contract Example 2. Promise of the seller 3. Promise of the buyer 4. Signatures of both parties 5. Date 1. Name and Address of both parties

4. Promisor (Obligor) Promisee (Obligee) General: Insurer Insured Carrier Shipper Parties to an Insurance Policy Parties to a Transportation Contract Landlord (Lessor) Tenant(Lessee) Vendor Vendee Parties Agreeing Upon Occupation of a Building for Money (a Lease) Parties to a Sales Contract Parties to a Contract Parties may be: individuals, partnerships, corporations, governments Examples:

5. FORMAL contract under seal, contracts of record, negotiable instruments EXPRESS IMPLIED INFORMAL spoken or written words created by law based on acts or conduct of parties all other contracts Classes of Contracts OR OR

6. VALID VOIDABLE VOID binding and enforceable circumstances surrounding execution or lack of capacity allows rejection at option of one party without legal effect Classes of Contracts OR OR

7. EXECUTED EXECUTORY completely performed something remains to be done BILATERAL UNILATERAL one promise given in exchange for another one party promises to perform after the other party does some designated act Classes of Contracts OR OR

8. Other Types of Contracts • OPTION CONTRACT: gives one party the right to enter into a second contract at a later time. • RIGHT OF FIRST REFUSAL: obligates the offeror to make the offer to the person holding this right first.

9. Quasi Contracts • In certain situations, the law regards it as unjust for a person to receive a benefit and not pay for it. • In such a case, the law of quasi contracts allows the performing person to recover the reasonable value of the benefit conferred on the benefited person even though no contract between them requires any payment.

10. Intent Intent Unjust Enrichment No Contract Avoided Contract Void Agreement Acceptance Offer Communication Communication Quasi Contract Contract Express Formal Executory Bilateral Implied Informal Executed Unilateral Option First Refusal Contractual Liability