Business Law – Assignment Example
Unit 4: The Nature of Contracts and Business Law By Ron Steele Unit 4: The Nature of Contracts and Business Law There are certain requirements for a valid contract as discussed by Clarkson, Miller, Jentz, and Cross (2006). These requirements are: (1) an agreement to form a contract, which normally includes an offer and an acceptance; (2) consideration provided, which would usually be something of value received or promised; (3) contractual capacity of both parties, or the legal characteristics of being competent to enter into a contract; and (4) legality of the contract (Clarkson et al., 2006).
A critical part of a contract is who can accept an offer. Clarkson et al. (2006) makes mention of this concept as: “acceptance would be a voluntary act either in words or in actions by the offeree that shows assent to the terms of the offer. The acceptance must by unequivocal and communicated to the offeror.” (Clarkson et al., 2006).
In this case, we can see that Carrie did not breach a valid contract to Antonio since he was still thinking about the offer. Antonio never made a definite and unequivocal acceptance of the offer. As a result, Carrie is under no obligation to Antonio.
According to Clarkson et al. (2006), there are both bilateral contracts and unilateral contracts. The authors mention that bilateral contracts are ‘a promise for a promise’ in classification. No performance, payment of money, or exchanging of merchandise has to occur for this type of contract to be in effect. (Clarkson et al., 2006).
In contrast, unilateral contracts are ‘a promise for an act’ type of classification. These contracts are completed when the action is performed instead of a mere exchange of promises. (Clarkson et al., 2006). In the Unit Four case, it appears that Carrie and Norvel have entered into a unilateral contract since Norvel overheard the offer which was being made. In return, Carrie made an acceptance by hearing his verbal acceptance and then giving him the books.
The authors further describe express vs. implied-in fact contracts (Clarkson et al., 2006). Mention is made in the book how express contracts have the terms of the agreement detailed and listed where it is easy to identify. This type of contract can be oral or written. An example would be a lease for an apartment. The lease would be an express written contract. (Clarkson et al., 2006).
Implied-in-fact contracts, on the other hand, are described by Clarkson et al. (2006) as contracts that are implied by the conduct of the parties involved. In fact, conduct is the primary basis for this type of contract, and no words need to be exchanged. (Clarkson et al., 2006). In the Unit Four case, it appears that Carrie and Norvel entered into an implied-in-fact contract. Clarkson makes mention of four factors for this type of contract: (1) The plaintiff gave some service or property; (2) The plaintiff expected to by paid for the service or property, (3) the defendant should be aware that payment is expected; and (4) The defendant had a chance to reject the service or property, but chose not to. (Clarkson et al., 2006).
Finally, the question arises on whether Carrie can revoke her offer by selling to Antonio. Clarkson et al. (2006) states how this would not be allowed in unilateral contracts such as the one Carrie and Norvel agreed to. The authors mention that unilateral contracts are not able to be revoked once performance begins. (Clarkson et al., 2006). Since the act was completed and the exchange of the books occurred, Carrie won’t be able to revoke her offer and change her mind under normal circumstances, or unless Norvel would agree to reverse the contractual obligation that already occurred.
Clarkson et al. (2006). West’s Business Law: Text and Cases, 12th edition. Mason, OH: Thompson Higher Education.