1. In your own words describe how a contract is formed. (Write one paragraph.)
A contract is an agreement that gives rise to the legal rights & obligations between parties – rights that will be protected & obligations that will be enforced in court. This agreement, or legally enforceable promise, is entered into by two or more voluntary parties who have the intention of creating a legal obligation that has the undertaking that something will or will not occur. The offer is the first step in the formation of a contract. An offer can be either verbal or written. A party makes an offer when he/she proposes to purchase or sell an item, or proposes to perform a particular act for a price.
2. What is “Consideration”? Give an example. (Write one paragraph.)
A consideration is something of value given by a promisor to a promisee in exchange for something of value given by a promisee to a promisor. This is usually a payment but can also be an act or a forbearance to act. A consideration consists of a legal detriment & a bargain. Legal detriment is a promise to do something or to refrain from doing something in the context of an agreement. A bargain is something that the promisor wants. Legal detriment & bargain principles come together in consideration & create an exchange relationship, one that both parties agree to exchange something that the other wishes to have. The purpose of consideration is to ensure that there is a present bargain & that the promises of the parties are reciprocally induced. Classically, consideration required that a promise be of detriment to the promisor or of benefit to the promisee.
3. Discuss the difference between a unilateral & a bilateral contract. (Write 1-2 paragraphs.)
In a unilateral contract, only one party to the contract makes a promise. An offer of a unilateral contract may often be made to many people by means of advertisement, but as a general rule, an advert is not an offer. In the situation that the offer is made to...