Chapter 7 summary:
This Chapter follows all the details about what is done to create a contract. Overall, a contract is just a
agreement with rules, rights, and obligations that the parties must follow. Contracts are created through
meetings of two parties, and it must result in an equal trade of consideration. When forming a legally
binding contract you must follow certain rules such as an intention to create legal relations, meeting of
the parties involved. And finally, an exchange of value or promises. In this chapter we learn the
difference between an intention to create legal relations as well as the difference of a social
arrangement. A contract is formed/created through acceptance of an offer. Not every statement is
labeled as an offer. The courts have a good system which relies on the “reasonable person” meaning if a
reasonable person would not think its an acceptance or offer or whatever the issue may be then it’s not
legally binding. Contractual offers must be communicated and received as an offer. Offers can be made
by speaking, writing, or through certain advertising. Offers that haven’t been accepted still have time to
revoke their offer. If an offer is placed in an option, certain rules are used for tender situations.
Counteroffers can open up new offers from the offeree. An offer can also be undone under certain
circumstances such as death or insanity and more. When looking at contracts a major point to look at is
acceptance. Acceptance happens when an offeree agrees to certain terms planned by the offeror.
Acceptance can be viewed from two ways; one is acceptance can be accepted by performance and
promise. Unilateral contracts are exchanged for a promise while bilateral contracts are promises
exchanged for a certain promise. When accepting an offer over distance whether it’s over online as long
as distance is involved certain issues will come forth. The general rule is a contract is created when and
where the acceptance is received. This rule applies usually to instantaneous forms of communication.
The counterpart to the general rule is the postal rule. It says that when a contract is made when and
where the acceptance is sent by the offeree.