Chapter 9 - pages 276

9-1 How is a contract generally defined?

A contract is generally defined as All agreements that are made by free consent of
parties. They have several elements that consist of an offer, an acceptance of that
offer, and the Enforcement of that offer and acceptance.

9-2 Explain the distinction between a void and a voidable contract; between an
executed and an executory contract; between a unilateral and a bilateral contract.

Difference between void and Voidable

1. Void contracts are invalid from the very beginning. Voidable contracts are
valid from the beginning.
2. Void contracts are not binding. Voidable contracts are binding.

Difference between executed and executory

1. Executed requires that both parties fulfill or complete their side of the contract
before it is finished. Executory is where there is still something left to be
performed or the execution of the task was never fully fulfilled.

9-3 Describe the three requirements for a valid acceptance.

1. Intent to accept
a. This means that you intended to accept the proposal of the agreement
and this can be shown.
2. Acceptance must be communicated
a. The person that has the proposal of the agreement must convey their
interest.
3. mirroring the Terms of the offer:
a. The office must be satisfied with the terms of the agreement before
giving acceptance for the same.

9-4 Describe the three requirements for a valid offer.

1. You must first have the objective to enter into a legal contract.
2. You must have a clear, exact, and well-defined offer.
3. The person making the offer must communicate the offer to the other person
within the specified timeframe.
9-5 Explain how an offer can be terminated.

The termination of an offer can be done is a few difference ways.

1. The time lapses for the agreement.

2. One of the people in the offer dies.
3. The key aspects of the offer and deal are not longer available. Something like a
building being sold burns down would void an offer.
4. The person offered the deal says no to accepting the deal aka a rejection of the
offer.
5. The person who makes the offer backs out of the deal.

9-6 Explain the difference between liquidated and unliquidated debts.

Difference between liquidated and unliquidated debts.

1. Liquidated debts it is debt that has an exact monetary value. Unliquidated debts
are the opposite of that it is a debt without a monetary value.
2. Liquidated debts do not have disputes and the unliquidated debts have disputes
arise because there is not a prefixed amount of money where the liquidated
does.

9-7 Fisher, an employment agency, sued Catani, a minor, for breach of contract for the
balance due the agency of $101.25 as a commission for finding Catani employment.
The defendant disaffirmed his contract with the agency, while still a minor, two
months after obtaining the job and one month after he quit. Can he disaffirm? Explain.

I believe he can disaffirm. This is because the defendant is considered a minor and
thus the contract is not binding on the minor as it would be on an adult.
9-9 Osborne, a former chairman of the board of Locke Steel Company, entered into an
agreement with Locke that, on retirement, he would hold himself available for
consultation and would not work for any direct or indirect competitors of the
company. In exchange for these promises, the company agreed to pay Osborne
$15,000 a year for the rest of his life. After paying for two years, the company
stopped payments when Osborne refused to consent to a modification of the
agreement. Osborne sued. The defendant, Locke, argued that there was no
consideration because the contract was based on past services, and thus there was no
detriment to the promisee (Osborne). Who won? Explain.

The person who has won is Osborne. This is because the payment is being made to
Osborne for the promise made by the company to keep himself available for
consultation and not for the past services.

9-10 Fisher, an inexperienced businessman, bought equipment and chinchillas from Division
West Chinchilla in order to start a chinchilla ranch. Fisher got into the business because
Division West had told him that chinchilla ranching was an “easy undertaking... and no special
skills were required.” Fisher lost money operating the ranch. He sued, claiming that he had relied
on Division West’s fraudulent representations. Who won? Explain.

This case would most likely be won by Fisher. This is because the company made it seem like
the ranch would be very easy to operate and would not require skill. This means that the reliance
on that information that fisher was given lead to him taking this loss. The company Did
Fraudulent misrepresentation of the facts.

9-11 William Story promised his nephew that he would pay the nephew $5,000 if he gave up
“using tobacco, swearing, and playing cards and billiards until he was 21.” The nephew did so
and asked his uncle for the money. His uncle agreed to pay but died before he did so. The uncle’s
estate refused to pay, arguing that there was no consideration for the uncle’s promise. Should the
court uphold the agreement in this case? Why or why not?

The courts would uphold the agreement. This is because the suspension of right would be
sufficient to sustain the promise.

Chapter 10 page 295 and 296

10-1 List the criteria used by the courts in determining lost profits.

1. You must prove the fact that the defendant knows the loss of profits which the
buyer would have to incur.
2. They must prove there is a loss incurred or the damages should be calculated
with the utmost sincerity.
3. They must have the ability to prove to the court that they had tried everything
possible to lower the amount of damages on their account.
10-2 Why are e-contracts important to present and future businesspeople?

1. The first point is that the cost indulges in making a written contract has been
reduced.
2. The safety of the contract is available way more in the e-contracts rather than in
the traditional form of contracts.
3. The time it takes to get the consent from all the parties is reduced too much.

10-3 What is meant by “compensatory damages”? Explain.

Compensatory damages refer to monetary damages that are provided to the injured
person for the breach of a contract or agreement.

An example of this could be person 1 hits another person’s car (person 2) and the
person 2 get severely injured. Person 2 could ask for compensation from person 1 for
the accident.

10-4 Explain what is meant by the “rescission” of a contract.

Rescission of a contract is the cancellation of a contract between the parties involved

in the agreement. This can be done via Mutual consent for cancellation or problems
during the formation of the contract cause it to fall apart (Something like one person
being a minor when the deal was formed would be an example)

10-5 Why should a party who has not breached a contract be required to mitigate the
damages of the breaching party?

You must help mitigate the damages of the loss as the party who caused the breach
cannot be held liable for the losses that can not control.

10-6 What are some provisions that should be included in e-contracts?

1. Remedies available to the buyers of delivered good under a contract

2. Statements of the seller of a product for references
3. Statements determining the guidelines of the payment for good and other
services.
4. Forums where all disputes would be settled should be created or arranged for.
5. Seller must provide disclaimer-of-liability
6. Terms of contracts should be considered implied and should also be binding to
all parties.
10-9 McDonald has contracted to purchase 500 pairs of shoes from Vetter. Vetter manufactures
the shows and tender’s delivery to McDonald. McDonald accepts the shipment. Later, on
inspection, McDonald discovers that 10 pairs of shoes are poorly made and will have to be sold
to customers as seconds. If McDonald decides to keep all 500 pairs of shoes, what remedies are
available to her? Explain.

There are several remedies for them.

1. They should have the right to get a specific performance by the seller.
2. They can claim for damages based on the breach of contract.
3. They can revoke their acceptance of the goods.
4. They can Claim damages for the accepted good.
5. They can reject the good that are delivered if they are not what was ordered.
6. They can accept part of the deal and reject the others that do not meet the standards.

10-11 Julius W. Erving (Dr. J) entered into a four-year contract to play exclusively for the
Virginia Squires of the American Basketball Association. After one year, he left the Squires to
play for the Atlanta Hawks of the National Basketball Association. The contract signed with the
Squires provided that the team could have his contract set aside for fraud. The Squires
counterclaimed and asked for arbitration. Who won? Explain.

I believe in this case the Squires won. Because their contract with Dr. J said he could not join
another organization for 4 years. In this case the courts could grant him an injunction preventing
him from joining those other organizations. Thus giving the Squires what they wanted in the first
place.