Business law – use provided resources to answer the disscussion
To Agree or Not To Agree
This week, you have been learning about the essential requirements of all contracts. The initial step toward forming a contract is agreement. Agreement has been satisfied when one party makes an offer to a second party and that second party accepts the offer. Consider the following situation:
Johnny and Sally are students at Nononline University. Sally often admires Johnny’s iPod in the Business Law class that they take together. One Friday night she decides to send Johnny the following e-mail:
“Hi Johnny. You know I just love your MP3 player, all the music that’s on it and the playlists you have created. I’d like to offer you $400 for the MP3 player and all the music on it. If I do not hear from you by midnight on Sunday, I’ll consider my offer accepted. Thanks. I hope you decide to sell. Sally” Johnny ignores the email and does not respond. Sally and her boyfriend go to Johnny’s dorm room Monday afternoon. Sally attempts to give Johnny $400. He refuses the money and refuses to give Sally the MP3 player. Johnny claims that he never accepted Sally’s offer. Sally insists that he did and goes to get campus security. Sally’s boyfriend waits with Johnny in his room.
Based on your reading for this week
Is there agreement and a contract?
With these thoughts in mind:
Post a statement by Day 3 that declares whether or not you believe there is agreement in this case and who should legally be entitled to the iPod, as well as the reasons for your determination.
Read a selection of your colleagues’ postings.
Respond by Day 5 to two or more of your colleagues’ postings in one or more of the following ways:
- Ask a probing question.
- Share an insight from having read your colleague’s posting.
- Offer and support an opinion.
- Make a suggestion.
- Expand on your colleague’s posting.
Return to this Discussion in a few days to read the responses to your initial posting. Note what you learned and the insights you gained as a result of the comments your colleagues made.
Be sure to support your work with specific citations from the Learning Resources and any additional sources.
Notes from teacher:
A contract is a legally enforceable promise. The parties must manifest by words or
conduct their mutual assent to a contract. Usually this is done when one of them
makes an offer and the other accepts it. Additionally, the contract must involve an
exchange of consideration; the parties must have the legal capacity to contract; and the
contract itself must be legal. Also, some contracts must be in writing; in the United
States, the most common contracts that must be in writing are those involving a sale
of goods for more than $500.
This week we will discuss the first requirement for a valid contract: that the parties have reached agreement on the terms of their deal. While all requirements for forming a contract are essential, the fact the parties agree on a deal is the most important element and the very core of the contract.
Offer and Acceptance: the process by which the parties reach agreement; that is both parties intend to contract is often referred to as reaching mutual assent. An offer is a promise made to another person called the offeree. An acceptance is the offeree’s approval of the proposal made by the offeror. It shows a willingness to be immediately bound by the proposal without further negotiation. A contract is formed as soon as the acceptance occurs. It is essential that the offer by seriously intended, definite, and communicated to the offeree by the offeror. To determine whether a valid offer and acceptance occurred first determine if the offer ended before the acceptance occurred. If so, there is no contract. Ways in which an offer can end are: lapse of time; rejected by the offeree; the offeree makes a counteroffer, the offeror revokes the offer; either the offeror or the offeree dies or becomes incapacitated; and the offer becomes illegal or impossible to perform. An important way to determine whether an offer has been made is the objective theory test. This theory states that a party’s intention to make an offer is guided by what a reasonable person (the offeree) would have thought the offeror intended.
Resources:
Reading
- Course Text: Goldman, A., & Sigismond, W. (2014). Business law: principles and practices (9th ed.). South-Western: Cengage Learning
- Chapter 7, “Agreement: Offer and Acceptance”
Of the four requirements of a contract, the first and foremost element of any contract is agreement, which is reached by an offer and its acceptance. In this chapter, you will explore agreement, what constitutes an offer (and what does not), and how a party accepts (or does not accept) that offer.
Focus on the definitions and concepts provided throughout the chapter. Review and think about the examples and short cases in the chapter that demonstrate the major ideas being conveyed and illustrate the ways in which offers can and cannot be made and accepted.
- Chapter 8, “Consideration”
The second of four elements of a legally enforceable contract is consideration. In this chapter, you will explore the concept of consideration, its nature, what it consists of, and any agreements that can be enforceable without consideration. Finally, you will be introduced to the equity doctrine of promissory estoppel.
Focus on the definitions and concepts provided throughout the chapter. Review and think about the examples and short cases in the chapter that demonstrate the major ideas being conveyed.
In order to have a legally enforceable contract, the parties to that contract must be competent. In this chapter, you will explore the definition of Capacity, then review the categories of individuals who are considered incompetent and therefore have limited capacity to enter into contracts.
Focus on the definitions and concepts provided throughout the chapter. Review and think about the examples and short cases in the chapter that demonstrate the major ideas being conveyed.
