Chapter 14 Flashcards
Elements of an Offer
1) Intent to be bound
2) Definite and certain terms
3) Communication to the offeree
Intent
the intended purpose or goal of an action, especially in a contract
How are contracts interpreted?
Objectively
Objective Theory of Contracts
the intent to contract is judged by the reasonable person standard and not the subjective intent of the parties
Auction with reserve
the seller is expressing intent to receive offers
Auction without reserve
the seller is treated as making an offer to accept the highest bid and therefore must accept it
Definite and certain terms
all the material terms must be included
Material Terms
allows a court to determine damages in the event that one of the parties breaches the contract
What is included in material terms?
subject matter, price, quantity, quality, and parties
Communication
the offer must be communicated to the offeree, only the offeree can accept the offer
How can an offer be terminated?
revocation, rejection, death or incapactiy, destruction, subsequent illegaility, lapse of time
Revocation
the offeror can revoke the offer at any time unless the offeree entered into an option contract
Rejection
the offeree can reject the offer
Counteroffer
if the offeree offers a counteroffer, the original offer is terminated
Illegality
if the subject matter of the offer becomes illegal, the offer immediately terminates
Death/Incapacity
if the offeror becomes incapacitated or dies, the offer immediately terminates
Lapse of time
the offer will expire after a reasonable amount of time, which depends on the subject matter of the offer
Option contract
the offeree gives the offeror a piece of consideration in exchnage for holding the offer open for a specific amount of time
Exceptions to Revocability
option contract, detrimental reliance
Detrimental Reliance
if the offeree had reasonably relied on the promise to hold to offer open and had taken action in reliance on the offer, the courts may use promissory etoppel to prevent the offeror from revoking their offer
Counteroffer
an offer made by an offeree that relates to the same matter as the original offer but proposes a substituted bargain that differs from the one proposed in the original offer
What are the ways to manifest intent?
by performance or by a return promise
Mirror image rule
the terms of the acceptance must mirror the terms of the offer
Mailbox Rule
provides that an acceptance is valid when the offerer places it in the mailbox… not applicable when there is instantaneous communication (over the phone, in person, by telex)
The Uniform Electronic Transactions Act
an offer is considered received via email when it enters the information processing system designated by the recipent
