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Chapter 12 NATURE AND CLASSES OF CONTRACTS: CONTRACTING ON THE INTERNET

Chapter 12 NATURE AND CLASSES OF CONTRACTS: CONTRACTING ON THE INTERNET. Definition of Contract. Offer. CONTRACT. Acceptance. A contract is a binding agreement between two or more parties.

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Chapter 12 NATURE AND CLASSES OF CONTRACTS: CONTRACTING ON THE INTERNET

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  1. Chapter 12NATURE AND CLASSES OF CONTRACTS: CONTRACTING ON THE INTERNET

  2. Definition of Contract Offer CONTRACT Acceptance • 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 to a Contract 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 may be: individuals, partnerships, corporations, governments Examples:

  4. Elements of a Contract Elements of a contract: • an agreement • between competent parties • based on genuine assent of the parties • supported by consideration • made for a lawful objective • in the form required by law if any

  5. Classes of Contracts 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 OR OR

  6. Classes of Contracts VALID VOIDABLE VOID binding and enforceable circumstances allows cancellation at option of one party without legal effect OR OR

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

  8. Contract Example } 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

  9. Other Types of Contracts • Option Contract: gives one party the right to enter into a second contract at a later time. Also, a contract to hold an offer to make a contract for a fixed period of time. • Right of First Refusal: obligates the offeror to make the offer to the person holding this right first.

  10. 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.

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