Chapter 12

Question 1

Agreement

Answer 1

When both parties agree, or show consent to the same bargain

Question 2

Does agreement need to be writing?

Answer 2

As long as consent is shown, no

Question 3

The 2 things a valid agreement needs are…

Answer 3

An offer and acceptance

Question 4

Offer

Answer 4

A promise, or commitment to do or don’t do something

Question 5

What does the Objective Theory of Contracts ask?

Answer 5

How did the offeree (the receiver) infer the contract terms?

Question 6

The 3 things an effective offer needs are…

Answer 6

1. Serious Intention
2. Reasonable Terms
3. Communication

Question 7

Serious Intention asks…

Answer 7

How serious + clear is the intention to be bound to the offer?

Question 8

Do emotional offers count as serious intention?

Answer 8

No

because they weren’t made seriously

Question 9

Situations that lack intent aren’t serious offers because…

Answer 9

There is no clear indication to be bound by the offer

Question 10

What is the difference between a negotiation and an offer?

Answer 10

1. Offers are proposals
2. Negotiations are a series of discussions leading up to an offer

Question 11

An offer can be MANUALLY terminated by…

Answer 11

1. Revocation
2. Rejection
3. Counteroffer

Question 12

Revocation

Answer 12

Opting out, or being inconsistent (not following the terms)

Question 13

When can an offer be revoked?

Answer 13

Before acceptance, unless it’s irrevocable

Question 14

When can the offeror revoke their offer in an option contract?

Answer 14

Until a specified date

They can respond to the offer anytime before that date

Question 15

Rejection

Answer 15

Saying “no”

They can’t go thru w/ the offer w/o your consent

Question 16

An offer isn’t rejected until…

Answer 16

The offeree knows the offeror said no

Any attempt after is a new offer

Question 17

Counteroffer

Answer 17

Rejecting + proposing a new offer

Question 18

Mirror Image Rule

Answer 18

The terms of the offeree’s acceptance must match the terms of the offer

Question 19

If you change/add onto an existing offer…

Answer 19

The old offer gets terminated + is a counteroffer

Question 20

An offer can be AUTOMATICALLY terminated by…

Answer 20

1. Lapse of Time
2. Destruction, death or incompetence
3. Being an illegal offer

Question 21

Lapse of Time

Answer 21

The time limit has passed, after a specified or reasonable amount of time

Question 22

Destruction, death or incompetence

Answer 22

a. The subject matter of the offer is destroyed
b. One of the parties either dies or is severely injured

Question 23

Acceptance

Answer 23

When the offeree willingly accepts the offer, creating a binding contract

Question 24

The offer must be accepted…

Answer 24

Unequivocally (clearly)

Question 25

When can silence count as acceptance?

Answer 25

If the 2 parties have dealt w/ each other before

Question 26

Is communication of acceptance necessary in a bilateral contract?

Answer 26

Yes, since acceptance = a promise

Question 27

In a unilateral contract, acceptance must be…

Answer 27

Evidently acted

Question 28

The Mailbox Rule states that…

Answer 28

Acceptance of an offer is effective once sent, not once recieved

Question 29

The Mailbox Rule only applies when…

Answer 29

Both parties aren’t face to face

Question 30

Authorized Acceptance won’t be effective until its…

Answer 30

Received by the offeree

Question 31

Express authorization exists when…

Answer 31

The offer specified how acceptance should be made

Question 32

Implied authorization exists when…

Answer 32

The offeror doesn’t specify the method of acceptance

In which case any reasonable method of acceptance is valid

Question 33

Substitute Acceptance exists when…

Answer 33

The offeror and offeree’s method of acceptance differ from one another