1. CHAPTER 8 DISCUSSION QUESTIONS
1) Define "offer."
2) What are the material terms of an offer?
3) Define "acceptance."
4) The acceptance of an offer that has not been expressed in words or by actions
is known as what?
5) Define "consideration."
6) Define "capacity."
7) When does breach of a contract occur?
8) What is it called when the courts may order the party in breach to fulfill the
contract, when appropriate?
9) What is the difference between a bilateral & unilateral contract?
10) What are the 3 legitimate defenses for contractual breach?
11) What is an indemnification agreement?
12) What does a noncompetition covenant or promise state?
13) What is a contractual agreement that gives someone permission to engage in
a specifically defined activity or to use a certain property owned by someone
else?
14) What is a means to protect ownership or proprietary rights to property?
15) What company is assigned the rights to sell the NCAA souvenir merchandise
at 88 NCAA championships?
4. 1) OFFER
-A PROMISE TO DO, OR REFRAIN FROM DOING, SOMETHING IN THE
FUTURE.
OFFEROR:
-THE PARTY MAKING THE OFFER.
OFFEREE:
-THE PARTY TO WHOM THE OFFER IS MADE.
5. MATERIAL TERMS
3) THE PARTIES INVOLVED.
4) THE SUBJECT MATTER.
5) THE TIME & PLACE.
6) THE CONSIDERATION.
6. 2) ACCEPTANCE
-OCCURS WHEN THE OFFEREE ACCEPTS THE OFFEROR’S PROPOSAL.
-CONTRACT IS NOT ENFORCEABLE UNTIL OFFEREE ACCEPTS.
-ONLY OFFEREE CAN ACCEPT.
-IF OFEREE REJECTS, THE OFFER IS DEAD.
-ACCEPTANCE BY SILENCE:
-THE ACCEPTANCE OF AN OFFER DOES NOT HAVE TO BE
EXPRESSED IN WORDS OR BY ACTIONS.
7. 3) CONSIDERATION
-THE EXCHANGE OF VALUE.
-MAKES THE CONTRACT BINDING.
-A CONTRACT IS ONLY LEGALLY BINDING IF BOTH
PARTIES ARE RECEIVING “VALUE.”
-3 MAIN FORMS OF VALUE:
1) MONEY
2) GOODS
3) SERVICES
8. 4) CAPACITY
-THE ABILITY OR POWER OF A PERSON TO ENTER INTO AN
AGREEMENT OR CONTRACT.
-THE LAW PRESUMES THAT CERTAIN PEOPLE LACK THE LEGAL
CAPACITY TO ENTER INTO CONTRACT.
1) MINORS
2) MENTALLY INCOMPETENT
11. THE 3 LEGITIMATE DEFENSES FOR CONTRACTUAL BREACH
3) IMPOSSIBILITY OF PERFORMANCE
-CONTRACT CANNOT BE PERFORMED.
-CONTRACT HAS BECOME ILLEGAL.
-ONE OF THE CONTRACTED PARTIES HAS DIED.
4) FRUSTRATION OF PURPOSE
-DUE TO UNFORESEEN CIRCUMSTANCES THE CONTRACTED
MATTER NO LONGER HAS ANY VALUE.
5) CONTRACTUAL IMPRACTICABILITY
-THROUGH NO FAULT OF THE BREACHING PARTY THE COST OF
FULFILLING THE CONTRACT HAS BECOME UNREASONABLE &
TEHREFORE IMPRACTICAL.
12. 7) DAMAGES
-IN ORDER TO REMEDY A SITUATION IF A CONTRACT
WERE BROKEN, THE COURTS MAY AWARD
COMPENSATORY PACKAGES OR LIQUIDATED DAMAGES
($) IN ORDER TO FULFILL THE OBLIGATION.
-SPECIFIC PERFORMANCE:
-THE COURTS MAY ORDER THE PARTY IN BREACH
TO FULFILL THE CONTRACT, WHEN APPROPRIATE.
13. UNILATERAL VS BILATERAL CONTRACTS
UNILATERAL CONTRACT
-THE OFFER CAN ONLY BE ACCEPTED BY PERFORMING AN ACT.
EXAMPLE:
-IF A-ROD HITS 50 HOMERUNS THE YANKEES WILL PAY HIM $20
MILLION.
-A-ROD CAN ONLY COLLECT THE MONEY BY HITTING 50
HOMERUNS. HE CANNOT PROMISE TO DO SO.
BILATERAL CONTRACT
-THE OFFEREE MAY ACCEPT A PROMISE BY THE OFFEROR WITH A
PROMISE.
EXAMPLE:
-IF A-ROD PROMISES TO HIT 50 HOMERUNS THE YANKEES WILL
PAY HIM $20 MILLION.
15. INDEPENDENT CONTRACT AGREEMENT
-HIRING OR OUTSOURCING AN ORGANIZATION TO PERFORM A CERTAIN
SERVICE OR UNDERTAKE A SPECIFIC PROJECT.
-AS A GENERAL RULE, AN EMPLOYER IS NOT LIABLE FOR THE NEGLIGENCE
OF AN INDEPENDENT CONTRACTOR.
-THE ORGANIZATION DOES RETAIN CERTAIN OBLIGATIONS:
1) MUST ASCERTAIN THAT THE INDEPENDENT CONTRACTOR IS
COMPETENT TO PROVIDE THE SERVICE OR COMPLETE THE PROJECT.
2) RESPONSIBLE FOR SAFELY MAINTAINING ANY BUSINESS PREMISES
OPEN TO THE PUBLIC.
16. FACILITY CONTRACT
-ALLOWS THE CONTRACTED PERSON(S) TO USE THE FACILITY FOR A
SET PERIOD OF TIME, FOR A SET FEE, & FOR A DESIGNATED
PURPOSE.
INDEMNIFICATION AGREEMENT:
-HOLDS THE FACILITY OWNER HARMLESS FOR THE EVENTS
CONTRACTED & EXPRESSES A PROVISION THAT THE CONTRACTED
PERSON(S) POSSESS INSURANCE FOR THE EVENT.
17. GAME CONTRACT
-GENERALLY BETWEEN 2 SCHOOLS THAT IDENTIFIES ONE GAME, OR
A SERIES OF GAMES, TO BE PLAYED.
-MICHIGAN & NOTRE DAME HAVE A GAME CONTRACT FOR FOOTBALL
UNTIL 2031.
19. LICENSING AGREEMENT
-A CONTRACTUAL AGREEMENT THAT GIVES SOMEONE PERMISSION TO
ENGAGE IN A SPECIFICALLY DEFINED ACTIVITY, OR TO USE A CERTAIN
PROPERTY OWNED BY SOMEONE ELSE.
LICENSE:
-A MEANS TO PROTECT OWNERSHIP OR PROPRIETARY RIGHTS TO PROPERTY.
20. SPONSORSHIP CONTRACT
-AN AGREEMENT WHEREBY CORPORATE SPONSORS PROVIDE
FINANCIAL PACKAGES OR SOME KIND OF IN-KIND PRODUCT TO THE
GAME/EVENT IN EXCHANGE FOR ADVERTISING SPACE OR A PROMISE
TO USE THE PRODUCT BY THE HOST ORGANIZATION IN A MANNER
THAT IS BENEFICIAL TO THE SPONSOR.
IN-KIND PRODUCT:
-GOODS OR SERVICES OTHER THAN MONEY.
