Podcast
Questions and Answers
What is a necessary element of an offer?
What is a necessary element of an offer?
What is the primary purpose of consideration in a contract?
What is the primary purpose of consideration in a contract?
Which of the following groups has limited contractual capacity?
Which of the following groups has limited contractual capacity?
What is the effect of the privity of contract rule?
What is the effect of the privity of contract rule?
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What is the key element of an acceptance?
What is the key element of an acceptance?
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What is the primary intention of the parties in a contract?
What is the primary intention of the parties in a contract?
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Which of the following agreements is likely to be considered as having an intention to create legal relations?
Which of the following agreements is likely to be considered as having an intention to create legal relations?
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What is the principle that assumes contracts are binding and should be enforced?
What is the principle that assumes contracts are binding and should be enforced?
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What is the term for the ability to enter into a binding contract?
What is the term for the ability to enter into a binding contract?
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What is the outcome of a contract that violates the law or public policy?
What is the outcome of a contract that violates the law or public policy?
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What is the term for the fulfillment of contractual obligations?
What is the term for the fulfillment of contractual obligations?
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What is the result of a failure to perform contractual obligations?
What is the result of a failure to perform contractual obligations?
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Study Notes
Offer and Acceptance
- Offer: A proposal made by one party to another, indicating a willingness to enter into a contract.
- Acceptance: The unconditional agreement to the terms of the offer, resulting in a binding contract.
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Key elements:
- The offer must be clear and definite.
- The acceptance must be unconditional and mirror the terms of the offer.
- The acceptance must be communicated to the offeror.
Consideration
- Consideration: Something of value given in exchange for a promise, necessary for a contract to be enforceable.
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Types of consideration:
- Executory consideration: A promise to do something in the future.
- Executed consideration: An act performed in exchange for a promise.
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Key elements:
- Consideration must be sufficient, but not necessarily adequate.
- Consideration must be given in exchange for a promise.
Capacity
- Contractual capacity: The legal ability to enter into a binding contract.
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Groups with limited capacity:
- Minors (under 18): Contracts are generally voidable.
- Mentally incapacitated individuals: Contracts are generally voidable.
- Corporations: Have the capacity to enter into contracts through authorized agents.
Privity of Contract
- Privity of contract: The rule that a contract only affects the parties who are directly involved in the contract.
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Key element:
- Only parties to the contract can enforce it or be bound by its terms.
Intention to Create Legal Relations
- Intention to create legal relations: The requirement that parties intend to enter into a legally binding agreement.
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Key elements:
- Parties must intend to create a legally binding agreement.
- Social or domestic agreements are generally not considered to have the intention to create legal relations.
Sanctity of Contracts
- Sanctity of contracts: The principle that contracts are binding and should be enforced.
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Key element:
- Contracts are presumed to be legally binding and enforceable.
Illegality
- Illegality: A contract that violates the law or public policy is unenforceable.
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Key elements:
- Contracts that promote illegal activities or violate public policy are void.
- Contracts that violate statutory laws or regulations may be void or voidable.
Contractual Capacity and Agreement
- Contractual capacity: The ability to enter into a binding contract.
- Agreement: The mutual understanding and consent of the parties to the contract.
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Key elements:
- Parties must have the capacity to enter into a contract.
- Parties must have reached a mutual understanding and consent to the contract terms.
Performance
- Performance: The fulfillment of contractual obligations.
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Key elements:
- Parties must perform their contractual obligations in accordance with the contract terms.
- Failure to perform may result in contractual breach and legal consequences.
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Description
Test your knowledge of contract law fundamentals, including offer and acceptance, consideration, capacity, privity of contract, and more. Review key concepts and elements of a legally binding contract.
