Lecture 1: What is a Contract?

Question 1

What is a contract?

Answer 1

1. A legal agreement between two or more parties to perform a legal action.
2. It interprets the clauses explaining the expectations of its different parties.
3. It supplies necessary terms, and defines avenues of possible recourse if one party breaches the contract.

Question 2

When a contract is formed, what are the five steps?

Answer 2

1. Offer - meeting of minds
2. Acceptance - meeting of minds
3. Consideration
4. Legality of Purpose
5. Representation (Capacity to Represent)

Question 3

What is the proposal from one party to another?

Answer 3

The Offer

Question 4

The Offer must meet what three conditions?

Answer 4

1. Offering party displays current intention to contract
2. Must be definite and certain (not hedged)
3. Must give other party right or power to accept or reject the offer (not under duress)

Question 5

An ___ creates the power of acceptance in the person/s to whom the offer is made.

Answer 5

Offer

Question 6

Is a voluntary act by the person to whom the offer is made, indicating his total agreement with each and every term of the offer.

Answer 6

Acceptance

Question 7

Acceptance must meet some criteria including what four items?

Answer 7

1. Being a response to a valid offer.
2. Only accepted by the person to whom the offer was made.
3. Must be communicated (silence is not acceptance)
4. A counter offer is not an acceptance

Question 8

A bid is an ____, whereas an award is an _____.

Answer 8

1. Offer

2. Acceptance

Question 9

Could be money (price or compensation for service) other cash goods (such as the discharge of an obligation that has value)

Answer 9

Consideration

Question 10

Must be presented in a certain form for the contract to be valid. Provides a rational reason for entering into the contract, and an expectation of receiving something of value for performing the contract satisfactory.

Answer 10

Consideration

Question 11

The main question in case of a dispute is:

Answer 11

Does a contractual relationship exist between the parties of the dispute?

Question 12

A contract chain identifies which parties are in a contractual relationship with each other, this creating a ________.

Answer 12

“Privity of the Contract”

Question 13

To enforce contract rights against another person, the general rule is that you must have _____ with that person.

Answer 13

Privity of contract

Question 14

A ___ action does not depend on Privity.

Answer 14

tort