Chapter 7 Introduction to Contracts

In Chapter 7 we are introduced to the legal meaning of the term contract. A contract is a legally enforceable agreement that is created when two or more competent parties agree to perform, or to avoid performing, certain acts that they have a legal right to do and that meet certain legal requirements. We differentiate a contract from an agreement, state the purpose of a contract, and explore the elements that make a contract enforceable. The chapter also briefly introduces the kinds of contracts—oral or written, express or implied, formal or simple, and entire or divisible. This chapter also discusses the status of a contract—is the contract in the process of completion, or completed? Finally we take a look at the enforceability of the contracts. Students need to recognize that Chapter 7 merely offers an introduction to these topics which will be explored in detail within the later chapters.

Chapter 8 Offer and Acceptance

In Chapter 7 students were introduced to the six elements of an enforceable contract. In Chapter 8, students will examine the first of these essential elements – offer and acceptance. For a contract to be valid, there must be a proposal that is both offered by the offerer and accepted by the offeree. There are three requirements of a valid offer; the offer must be definite and certain, communicated, and must intend an enforceable obligation. This chapter will then distinguish between the different types of offers, including bids, advertisements, and public offers. Lastly, we will cover the two requirements for a valid acceptance, as well as the three ways offers may be terminated.

Chapter 9 Mutual Agreement

In Chapter 7 students were introduced to the six elements of an enforceable contract, and Chapter 8 discussed offer and acceptance—the first of the essential elements for a contract to be valid. In Chapter 9, students examine the potential problems with achieving a meeting of the minds, the second of these essential elements. Genuineness, or reality, is critical to a valid contract, and if there is any misunderstanding, force, or deception the contract is voidable, and may be disaffirmed at the option of the injured party. A voidable contract results if agreement of either party is obtained by fraud, misrepresentation, mistake, undue influence, or duress, or if the contract is one of adhesion, or is unconscionable. Each of these terms will be explained in this chapter.

Chapter 10 Consideration

The previous chapters dealt with the various kinds of agreements. Chapter 9 discusses the nature and essentials of consideration, and through the use of examples, depicts their relevance in real life situations. Students will learn that consideration plays an indispensable role in a contract. Additionally, we explore the essential ingredients that constitute consideration and the various facets of consideration such as forbearance, promisor, promisee, pledge, general release, barren promise, preexisting duty, gratuitous promise, moral consideration, and past consideration.

Chapter 11 Competent Parties

Chapter 11 discusses the parameters to be borne in mind while parties enter into contracts. One of the prime requisites for this purpose is the competency of the contracting parties. The chapter also elucidates the legal status of contracts made by incompetent persons and how majority impacts the legality of contracts which were previously entered into by a minor. We also learn of the imposition of liability for a minor’s torts and crimes.