Contract Formation Flashcards
Define Contract
Agreement Between 2+ parties Creating reciprocal obligations Enforceable at law (ABC_E)
Elements of a contract
Mutual assent (offer and acceptance) Consideration
Bilateral Contract
K where offeror sought acceptance in the form of a promise
promise for promise
Unilateral Contract
K where the offeror sought acceptance by the offeree undertaking specific performance or forbearance
(promise for a future act)
When is unilateral contract created?
when offeree begins performance of action sought by offeror (not mere preparation)
When is unilateral contract ONLY satisfied by full performance?
when clearly indicates in offer; or
an offer to the public (such as reward)
Sources of K Law
Common law or
UCC governs transactions in moveable goods
Define goods
all things moveable at teh time of identification to the contract for sale
Offer
Display of willingness to Enter into a contract on Specified terms made in a way that would lead a RPP to understand that,acceptance having been sought, would result in binding K (DESK)
Option
something of value given to hold offer open
Offer Misc.
Offeror is master of the offer;
can revoke at an time prior to acceptance
stays open for reasonable amount of time w/ exception for partial performance
offer gives power of acceptance to offeree
Advertisement
never an offer; an invitation or solicitation of an offer (except in certain circumstances if RPP would understand intent to be offer).
Izadi . Machado Ford
Acceptance
Agreement, either Express or implied to the Terms of an offer so that a Binding K is formed (AET at BK)
Mailbbox Rule
only applies to acceptance.
once written communication is put i mailbox, acceptance becomes effective “at moment of dispatch”
Mailbox Rule Exceptions
if K expressly states otherwise; or
not reasonable under circumstances
Conditional Acceptance
if acceptance conditioned on new terms, is a Rejection/Counteroffer
Mirror Image Rule
acceptance must be mirror image of offer to become binding K
Last Shot Rule
party firing last doc going to provide offer which is accepted
Counteroffer
offeree’s new offer that
Varies the terms of original offer
is a rejection of original offer
Defective Acceptance
is a counter offer
Ellefson v Megadeth
Objective Rule of Ks
one having the capacity t understand a written document who signs without reading is bound by signature; intent is immaterial (Ray v. Eurice & Bros.)
Termination of Offer
Revocation terminates offeree’s power of acceptance when communicated:
directly or indirectly (RPP would understand)
effective when received.
“received” is when it comes into the “possession” or deposited in authorized place; need not be read by recipient to be effective
Limitations on Offeror’s Power to Revoke
Option K;
Detrimental Reliance
Particl Performance (unilateral Ks)
Consideration
something of Value (performance, forbearance or a return promise) Received by a promisor from a promisee in eXchange for something of value Given by the proimisor to the promisee (Virgin Runs XXX Guns)
