Contract Formation Flashcards
Contract Formation:
Formation of a contract requires a______ in which there is a ____________ to the exchange and a ___________.
Formation of a contract requires:
- a bargain in which there is
- a manifestation of mutual assent to the exchange AND
- a consideration
Contract Formation:
A bargain is __________.
Bargain: an agreement to exchange of:
- Promise for a promise
- Promise for a performance
- Performance for a performance
Contract Formation:
Manifestation of mutual assent requires _____.
Manifestation of mutual assent requires
- that each party either make a promise or begin to render a performance.
- There needs to be a “Meeting of the Minds.”
Contract Formation:
Mutual assent means ______.
Mutual Assent: For a contract to be formed,
- the parties must reach an agreement to which they “mutually assent.”
- This mutual assent is almost invariably **reached through what are called “the offer” and “the acceptance.” **
Contract Formation: Mutual Assent
To determine mutual assent, you look to _______.
Look to the Intent of Parties
Rule: Judge intent by whether reasonable person would understand contract to be made based on words and actions of the parties
- Can only be judged by outward manifestation of words and actions.
- NOT determined by secret intention of parties
Contract Formation: Mutual Assent
Intent of the parties is judged _________.
Intent of the partied is judged objectively
General Rule: **Subjective intent of parties does not matter in contract formation. **
Test for intent: The objective measure of a party’s intention is, in most circumstances, **what a reasonable person in the position of the other party would conclude that his objective manifestations of intent **
Contract Formation: Mutual Assent
Restatement § 19: Conduct as Manifestation of Assent says _____________.
Restatement § 19: Conduct as Manifestation of Assent: “The manifestation of assent may be made wholly or partly by written or spoken words or by other acts or by failure to act.”
(1) May be made
- **wholly or partly by written or spoken words OR **
- **by other acts OR **
- by failure to act
(2) The conduct of a party is not a manifestation of his assent unless
- he intends to engage in the conduct AND
- knows or has reason to know that the party may infer from his conduct that he assents
(3) The conduct of a party may manifest assent even though he does not, in fact, assent
Contract Formation: Mutual Assent
Restatement § 19: Conduct as Manifestation of Assent
Manifestation of assent may be made by ________
Manifestation of assent may be made
- wholly or partly by written or spoken words OR
- by other acts OR
- by failure to act
Contract Formation: Mutual Assent
Restatement § 19: Conduct as Manifestation of Assent
The conduct of a party is NOT a manifestation of his assent unless __________.
The conduct of a party is NOT a manifestation of his assent unless:
- he intends to engage in the conduct AND
- knows or has reason to know that the party may infer from his conduct that he assents
Manifestation of mutual assent
usually takes the form of ___________.
Manifestation of mutual assent usually takes the form of an offer from one party followed by an acceptance by the other
If H announces to a group, “I will pay $1000 to anyone who tells me the name of the thief that stole my lawnmower last night.”
1) This is an example of a __________ contract.
2) If A speaks up and promises to tell H the name, has a K been made? If yes, what kind would be made? If not, then why?
This is an example of a **unilateral **contract, which can only be accepted by supplying the name.
A’s promise to tell the name does NOT transform this into a bilateral contract.
- H’s offer cannot be accepted by a promise to do what H is asking.
- H’s offer can be revoked even after A makes the promise. The contract can ONLY be accepted by providing the name.
EX: If P is about to enter law school and plans to marry during the winter break. His father offers him $1,000 if he postpones his wedding plans until after he has completed his first year. P postpones his wedding as requested, but shortly thereafter P’s father dies.
Can P enforce his father’s promise?
Yes, The father’s death does not terminate the offer because P already accepted the offer prior to the father’s death by postponing the wedding. P is entitled to the $1,000.
If an offeree has commenced, but not completed performance, can the offeror revoke the contract?
No, under R2d, an offer for a unilateral contract becomes temporarily irrevocable if the offeree has commenced but not completed performance.
*** NOTE: the offeree must have begun the actual performance requested and NOT just mere preparations to perform
