Ch 12 Traditional & E-contracts Flashcards
Contract
Agreement that can be enforced in court
Bilateral contract
Offeror makes an offer to the offeree
Offeree must promise to perform
Unilateral
Offeree can accept offer only by completing the contract performance
Formal contract
Statutes or rules which state that a contract must be in writing to be enforceable
Void
No contract
Voidable
Valid contract that can be avoided at the option of one of the parties
Requirements of a valid contract
Agreement, consideration, contractual capacity, legality
Agreement
The offer AND acceptance
Requirements for offer
Serious intention, definition of terms, communication
Offeror’s Serious Intention
Contract determined by what a reasonable person deems serious
Intent may be lacking with:
Expression of opinion, statement of future intent, preliminary negotiations, invitations to bid, ads and price lists
Expression of opinion
“I believe this car is worth $40,000 and I wouldn’t sell it for less”
Statement of future intent
“If Panthers win the SB, I’ll move houses”
Preliminary negotiations
Not a serious offer, just a suggestion
Ads/price lists
Belk’s has wrong price in ad, not required to honor it
Definiteness of terms requirements
Identify parties, object/subject matter of contract, consideration to be paid, time of payment/performance
Communication
Offeree must have knowledge of offer by person or person’s agent
Termination of offer may happen by
Action of the parties OR operation of law
Revocation
Can withdraw anytime before offeree accepts offer OR effective when offeree or agent receives it
Option contract
Promise to hold offer open for specified period of time in return of consideration
Counteroffer
Rejection of initial offer but make a new one
Mirror Image Rule
Any change in terms automatically terminates offer and substitutes counteroffer
Termination by law if:
Lapse of time, destruction of subject matter, death/incompetence, supervening illegality
Acceptance
Voluntary act, expressed or implied, that shows assent to terms
Unequivocal acceptance
Mirror image, acceptance must mirror offer
Silence
Only acceptance when offeree has duty to speak
General rule of bilateral contracts
Acceptance timely if made before offer is revoked or terminated
Mailbox rule
Acceptance effective the minute it’s put in the mailbox
Authorized means of acceptance
Sometimes the offer specifies how acceptance should be made
Displaying the online offer should include
Seller’s hyperlink to page with full contract
Online provisions
Acceptance of terms, payment, return policy, disclaimer of liabilities, limitation on remedies, privacy policy, dispute resolution, forum selection clause, choice of law clause
Choice of law clause
Disputes settled in accordance with law of particular jusidiction
Online acceptances
Click on agreements, Shrink-wrap agreements, browse-wrap agreements
Click on agreements
Binding contract can be formed by clicking a box indicating you agree
Shrink wrap agreement
Contract terms inside box which party agrees on upon opening box
Browse wrap agreement
Scroll to bottom and it says “by reading this you agree to terms”; usually unenforceable
E-SIGN
Gives e-signatures & e-docs legal force; to be enforceable both parties must have prior agreement
Consideration
Value given in return for promise or performance
Consideration must have:
Legally sufficient value, bargain for exchange
Legally sufficient value
Something of legal value in the eyes of the law, promise to do something
Bargained for exchange
Something of legal value must be exchanged b/w parties to provide basis to bargain
Contractual capacity
Legal ability to enter into a contractual relationship
Certain situations where capacity may exist but contract is not legally binding
Minor, intoxication, mental incompetence
Legality
Legality of a contract; if specific clause is illegal the rest can still be enforceable
Contrary to public policy is generally
Void
Contracts not to compete in employment
Enforceable as long as time and geographic terms are reasonable
Unconscionable contracts
Procedural and substantive
Procedural contract
Contracts with inconspicuous print is void
Substantive contract
Contracts oppressive or overly harsh
Exculpatory clause
Releases party from liability in event of monetary or physical injury no matter who’s at fault
Exculpatory clauses are enforceable when
They are not ambiguous or they don’t shield parties from intentional conduct
Statute of frauds that must be in writing
- Interest in land
- Yearly agreements
- Collateral or secondary contracts
- Promise for marriage
- Sale of goods priced at $500 or more
Transfer pf rights to third party is
Assignment
Transfer of duties to third party is
Delegation
Effect of delegation
Delegator remains liable if other doesn’t perform
