Chaper 11- Agreement Flashcards
Mutual assent
Agreement
Agreement
The parties must agree on the terms of the contract and manifest to each other mutual assent to the same bargain
Offer
A promise or commitment to do or refrain from doing some specified thing in the future
Three elements for an offer to be effective:
- Serious intention to become bound by the offer
- The terms of the offer must be reasonably certain, or definite, so that parties and the court can ascertain the terms of the contract
- The offer must be communicated by the offeree
Expression of opinion
Not an offer. Does not indicate an intention to enter into a binding agreement. “You will probably feel better in four days”
Statement of future intent
A statement of an intention to do something in the future is not an offer. “I plan to sell stock”
Preliminary negotiations
A request or invitation to negotiate is not an offer. Only expresses a willingness to discuss the possibility of entering into a contract.
Agreements to agree
Traditional: Agreements to agree to the material terms of a contract at some future date. Not considered binding contracts.
Modern: agreements to agree may be contracts if it is clear that the parties intended to be bound.
Advertisements
Treated not as offers to contract but as invitation to negotiate
Definiteness of terms
- Identification of the parties
- Identification of the object or subject matter of the contract, including the work to be performed, with specific identification of such items as goods, services, and land.
- The consideration to be paid.
- The time of payment, delivery, or performance.
Communication
The offer must be communicated to the offeree
Revocation
The offerors act of withdrawing an offer
Irrevocable offers
Cannot be revoked or cancelled
Option contract
Created when an offeror promises to hold an offer open for a specified period of time in return for a payment (consideration) given by the offeree
Promissory estoppel
The promissory or offeror is barred from revoking the offer
Estop
To bar, impede, or preclude something
Rejection of the offer by the offeree
If the offeree rejects the terms, the offer is terminated
Counteroffer by the offeree
A rejection of the original offer and the simultaneous making of a new offer
Mirror image rule
Requires the offeree’s acceptance to match the offerors offer exactly
Termination by operation of law
- Lapse of time
- Destruction of the specific subject matter of the offer
- Death or incompetence of the offeror or offeree
- Supervening illegality of the proposed contract
Lapse of Time
An offer terminates automatically by law when the period of time specified in the offer has passed.
If the offer does not specify a time for acceptance, the offer terminates at the end of a reasonable period of time.
(Reasonable period of time depends on the subject matter of the contract, business and market conditions, & other relevant circumstances)
Destruction of subject matter
When the specific subject matter of the offer is destroyed before the offer is accepted, the offer automatically terminates.
Death or incompetence of the offeror or offeree
If the offeror or offeree dies or becomes incompetent, this terminates the offer (unless the offer is irrevocable)
Supervening illegality
When a statue or court decision makes the proposed contract illegal, the offer automatically terminates.
