Chapter 12 Flashcards
Agreement
When both parties agree, or show consent to the same bargain
Does agreement need to be writing?
As long as consent is shown, no
The 2 things a valid agreement needs are…
An offer and acceptance
Offer
A promise, or commitment to do or don’t do something
What does the Objective Theory of Contracts ask?
How did the offeree (the receiver) infer the contract terms?
The 3 things an effective offer needs are…
- Serious Intention
- Reasonable Terms
- Communication
Serious Intention asks…
How serious + clear is the intention to be bound to the offer?
Do emotional offers count as serious intention?
No
because they weren’t made seriously
Situations that lack intent aren’t serious offers because…
There is no clear indication to be bound by the offer
What is the difference between a negotiation and an offer?
- Offers are proposals
- Negotiations are a series of discussions leading up to an offer
An offer can be MANUALLY terminated by…
- Revocation
- Rejection
- Counteroffer
Revocation
Opting out, or being inconsistent (not following the terms)
When can an offer be revoked?
Before acceptance, unless it’s irrevocable
When can the offeror revoke their offer in an option contract?
Until a specified date
They can respond to the offer anytime before that date
Rejection
Saying “no”
They can’t go thru w/ the offer w/o your consent
An offer isn’t rejected until…
The offeree knows the offeror said no
Any attempt after is a new offer
Counteroffer
Rejecting + proposing a new offer
Mirror Image Rule
The terms of the offeree’s acceptance must match the terms of the offer
If you change/add onto an existing offer…
The old offer gets terminated + is a counteroffer
An offer can be AUTOMATICALLY terminated by…
- Lapse of Time
- Destruction, death or incompetence
- Being an illegal offer
Lapse of Time
The time limit has passed, after a specified or reasonable amount of time
Destruction, death or incompetence
a. The subject matter of the offer is destroyed
b. One of the parties either dies or is severely injured
Acceptance
When the offeree willingly accepts the offer, creating a binding contract
The offer must be accepted…
Unequivocally (clearly)
When can silence count as acceptance?
If the 2 parties have dealt w/ each other before
Is communication of acceptance necessary in a bilateral contract?
Yes, since acceptance = a promise
In a unilateral contract, acceptance must be…
Evidently acted
The Mailbox Rule states that…
Acceptance of an offer is effective once sent, not once recieved
The Mailbox Rule only applies when…
Both parties aren’t face to face
Authorized Acceptance won’t be effective until its…
Received by the offeree
Express authorization exists when…
The offer specified how acceptance should be made
Implied authorization exists when…
The offeror doesn’t specify the method of acceptance
In which case any reasonable method of acceptance is valid
Substitute Acceptance exists when…
The offeror and offeree’s method of acceptance differ from one another
