Chapter 11 Flashcards
What three elements are necessary for an offer to be effective?
There must be a serious, objective intention by the offeror.
The terms of the offer must be reasonably certain, or definite, so that the parties and the court can ascertain the terms of the contract.
The offer must be communicated to the offeree.
How is intent determined in contract law?
Intent is not determined by the subjective intentions, beliefs, or assumptions of the offeror. Rather, it is determined by what a reasonable person in the offeree’s position would conclude that the offeror’s words and actions meant. Offers made in obvious anger, jest, or undue excitement do not meet the requirement of serious, objective intent. Because these offers are not effective, an offeree’s acceptance does not create an agreement.
What are non-binding agreements?
Agreements which cannot be enforced by law. An example would be an agreement to agree in the future (as long as it is clear that this was not meant to be legally binding)
What is generally required for an offer to be considered definite?
The identification of the parties.
The identification of the object or subject matter of the contract (also the quantity, when appropriate), 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.
What is communication in contract law?
A third requirement for an effective offer is communication—the offer must be communicated to the offeree. Ordinarily, one cannot agree to a bargain without knowing that it exists. This applies even if the litigant is not one of the offerees but someone who was aware of an offer which was not delivered.
What are the three ways an offer can be terminated by action of parties?
Revocation: Withdrawing an offer. May be done via express repudiation or performance of acts inconsistent with the existence of the offer. A revocation becomes effective when the offeree or their agent actually receives it.
Rejection: also effective only when it is actually received by the offeror or their agent.
Counteroffer
What are irrevocable offers?
Although most offers are revocable, some can be made irrevocable. Increasingly, courts refuse to allow an offeror to revoke an offer when the offeree has changed position because of justifiable reliance on the offer (under the doctrine of promissory estoppel)
Option contracts also count as irrevocable offers.
Promissory estoppel
Within contract law, promissory estoppel refers to the doctrine that a party may recover on the basis of a promise made when the party’s reliance on that promise was reasonable, and the party attempting to recover detrimentally relied on the promise.
What are option contracts?
A contract under which the offeror cannot revoke the offer for a stipulated time period (because the offeree has given consideration/payment for the offer to remain open).
What is the mirror image rule
A common law rule that requires that the terms of the offeree’s acceptance adhere exactly to the terms of the offeror’s offer for a valid contract to be formed. If one accepts everything but modifies the offer slightly, it is not an acceptance but a counteroffer.
How can the power of an offeree to transform the offer into a binding, legal obligation be terminated?
Lapse of time.
Destruction of the specific subject matter of the offer.
Death or incompetence of the offeror or the offeree.
Supervening illegality of the proposed contract.
When may silence be construed as acceptance?
Silence may be an acceptance when an offeree takes the benefit of offered services even though he or she had an opportunity to reject them and knew that they were offered with the expectation of compensation.
Silence can also operate as acceptance when the offeree has had prior dealings with the offeror.
Ehat is the difference between a unilateral contract and a bilateral contract?
A bilateral contract is a promise for a promise, and a unilateral contract is performance for a promise.
Bilateral contracts require communication if acceptance.
What happens when an offeror specifies how an acceptance should be made?
When an offeror specifies how acceptance should be made, such as by overnight delivery, the contract is not formed unless the offeree uses that mode of acceptance. Both the offeror and the offeree are bound in contract the moment the specified means of acceptance is employed.
In an online transaction, how should a seller display their offer?
Displaying the Offer
The seller’s website should include a hypertext link to a page containing the full contract so that potential buyers are made aware of the terms to which they are assenting. The contract generally must be displayed online in a readable format such as in a twelve-point typeface. All provisions should be reasonably clear
