In this chapter, students will be able to understand: What is a contract? What are the sources of contract law? How can we classify contracts? What are the rules that guide the interpretation of contracts? | Chapter 13 Introduction to Contracts Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 13: Introduction to Contracts Contract (Definition): A legally enforceable agreement 13- A contract is defined as a legally enforceable agreement. 13- Elements Required For Contract Formation Agreement (Offer and Acceptance) Mutual Consideration (Value Given By Both Parties) Legal Purpose and Subject Matter (Object) Legal Capacity (Ability to Understand Terms and Nature of Contract; legal ability to enter into binding contract) Elements required for contract formation include an agreement (represented by a valid offer and a valid acceptance,) mutual consideration (meaning that both parties must give value in order to support the enforceability of the agreement,) lawful purpose and subject matter, and legal capacity (which is the ability to understand the terms and nature of the contract; as well as the legal ability to enter into a binding contract.) 13- Defenses to Enforcement of Contract Lack of genuine assent (fraud, duress, undue influence, misrepresentation) Lack of proper form requirements (statute of frauds writing requirement) Defenses to the enforceability of a contract include the lack of genuine assent as a result of fraud, duress, undue influence, or misrepresentation, and lack of proper form requirements, usually indicating non-compliance with the statute of frauds, a rule of law requiring that certain types of contracts be in writing in order to be enforceable. 13- The Objective Theory of Contracts Existence and interpretation of contract based on outward manifestations of intent by parties (objective, “reasonable person” standard of contract formation and interpretation) Subjective (individual) intent generally irrelevant Courts generally use the objective theory of contract interpretation, meaning that the existence and | Chapter 13 Introduction to Contracts Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 13: Introduction to Contracts Contract (Definition): A legally enforceable agreement 13- A contract is defined as a legally enforceable agreement. 13- Elements Required For Contract Formation Agreement (Offer and Acceptance) Mutual Consideration (Value Given By Both Parties) Legal Purpose and Subject Matter (Object) Legal Capacity (Ability to Understand Terms and Nature of Contract; legal ability to enter into binding contract) Elements required for contract formation include an agreement (represented by a valid offer and a valid acceptance,) mutual consideration (meaning that both parties must give value in order to support the enforceability of the agreement,) lawful purpose and subject matter, and legal capacity (which is the ability to understand the terms and nature
