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To make a contract valid, not only consent is necessary, even it should also be free. In law of contract consent is said to be free if it is not caused by any of the following: - Coercion Undue influence Fraud Misrepresentation Mistake There is a distinction in between consent and free consent. If consent is affect or taken by one of the above express elements than it will be not deemed as free consent.
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Business Law Principles and Practices Golclma:n, A ., & Sigismond, W. (2014). Business Law: Principles and Practices (9th ed.). South- Western Cengage Learning. Cengage Advantage Books PRINCIPLES AND PRACTICES emorialize Contracts in riting Statute ol Frauds ~APTER PREVIEW e Status of Oral and Written ntracts ntracts Required to Be in Writing - Contract to Personally Pay the Debt of Another Person - Contract to Personally Pay the Debt of a Deceased Person - Contract Involving the Sale of an Interest in Real Property - Contract Made in Consideration of .Marriage - Contract That by its Terms Cannot Be Performed Within One Year of the Date the Contract Was Formed e Sufficiency of the Written Record ectronic Signatures rol Evidence Rule 201 > ~ CHAPTER ·HIGHLIGHTS ~ IN A BUSINESS SETTING This chapter identifies the relatively few contracts that are required by the Ia· of each state (called a statute of frauds) to be in writing to be enforceable in court. The chapter also summarizes the essential information that the writing must contain so as to satisfy the law. A brief opening discussion points out tr: advantages that written contracts have over those that are made orally. This :: followed by a discussion of parol evidence, a rule determining whether oral testimony external to a written contract that changes the terms of this writter contract may be introduced at a court trial. The concluding pages of the chapter introduce the electronic signature as a way to sign records. Adams, an attorney, represented Hall, who called himself an International Trader, in a deal with a company in India that was to result in Hall receiving $10 mi llion . Adams and Hall resided in the state of Maine. The attorney's fee of $1 mill ion for handling the case was to be paid when Hall received his money from the company. In order to receive this $10 million, however, Hall was required to pay an upfront fee of $100,000 to an agent of the company handling the deal in India. Hall had done business with this Indian company on prior occasions, but the agent was new to the company. Hall borrowed the fee from Garlock, a business associate, and signed a promissory note agreeing to pay back the $100,000 within five days. Adams made arrangements with a local bank to wire the money to the agent in India. Neither Hall nor Adams heard from the agent once the money was sent. Adams had orally guaranteed to repay Garlock if Hall did not himself repay the debt. When the due date of the note arrived, Garlock requested his $100,000, but Hall was unable to make payment. Garlock therefore brought a lawsuit against Hall for the money. He hired Adams as his attorney. The court awarded damages to Garlock requiring Hall to make payment. However, Hall had no assets from which to collect it. During the trial, Adams publicly reprimanded Hall during cross-examination for not paying his loan as scheduled ...
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62 CHAPTER 4: Offer, Acceptance, and Consideration CHAPTER 5: Contracts: Capacity, Genuine Assent, the Statute of Frauds, and Illegality CHAPTER 6: Third Parties, Performance and Discharge of Contracts, and Remedies Unit II Contracts rog80328_04_c04_062-088.indd 62 9/20/16 11:14 AM © 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. 63 C ontract law is of great importance in business and in everyday life. Common trans- actions such as buying a pack of gum at the corner grocery store, purchasing a ticket at a movie theater, or ordering a meal at a restaurant involve making contracts, but so does a complex patent licensing agreement between two multinational corporations. In this unit, we will explore the nature of contracts, the requirements for their valid formation, and the consequences for their breach. A contract is a legally enforceable agreement between two or more people. Although all contracts contain enforceable promises, not all promises result in contracts. Consider the following situation: Henry invites Ericka to dinner, and Ericka accepts. Henry looks forward to the date and can think of little else all day long. A half hour before they were to meet, Ericka calls Henry and tells him that she will not be able to keep their date because Ron has invited her to go danc- ing and she has accepted. Henry is upset, hurt, and angry and would like to sue Ericka for breach of contract, since she has clearly broken a promise made to him earlier that day and caused him distress. Will he succeed? Ericka may not be a very nice person, and she may have had a moral obligation to attend the dinner date. Nevertheless, she had no legal obligation to do so. The agreement that she breached was not a contract, but merely a social obligation that the courts will not enforce. In order for there to be a valid contract, certain essential elements must exist. These include an offer to enter into a contract, acceptance of the offer by the other party, an exchange of consideration between the parties, and a legal purpose for the contract. In addition, both parties must have the capacity to enter into a contract. We will explore these elements in depth in this unit. We will also discuss certain types of contracts that must be in writing to be enforceable and situations in which a contract is unenforceable due to a lack of genuine assent, such as in cases of fraud or mutual mistake of fact. We enter into contracts every day. On the way to work, you pick up a newspaper at a news- stand. You also stop for a cup of coffee at a cafe. While there, you use your phone to browse the Web and purchase tickets to a concert online. Finally, you arrive at the bus stop and pay your fare as you enter the bus that will take you to work or to class. In each of these examples, a contract was made. In each case, there was a valid offer and acceptance (your ordering the drink and the cafe’s providing.
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