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MBE Contracts > Contract Formation > Flashcards

Contract Formation Flashcards

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MBE flashcards
1
Q

Requirements for an Offer

A
  1. Outward manifestation (oral, written, or via conduct)
  2. A signal that acceptance will conclude the deal
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2
Q

Communications that are NOT offers:

A
  1. Preliminary negotiations
    • Is generic term that applies to the give-and-take that occurs during bargaining
  2. Invitation for an Offer
    • Is an advanced stage of prelimary negotiations, where the communicating party is closing in on a deal but wants other party to commit first
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3
Q

Multiple Offerees

(3 situations)

A
  1. Commercial advertisements
  2. Reward offers
  3. Auctions
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4
Q

Commerical Advertisements

American Advertising Rule

A

Ads addressed to multiple recipients are generally treated as invitations for offers, rather than offers

EXCEPTION: if the language in the ad is “first-come, first-served,” or “first 10 customers only” constitutes an offer because the means by which the goods/services will be allocated i nthe event of an excess of demand eliminates the need for further assent from the advertiser

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5
Q

Reward Offers

A

Generally, treated as offers becasue they are considered communications that promise a bounty in exchange for the performance of a specified task

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6
Q

Types of reward offers

A
  1. Self-limiting awards
  2. Open-field rewards
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7
Q

Auctions

A

General rule: the auctioneer is inviting offers, and the responsive bidsd are the offers

EXCEPTION: Where the auction is “without reserve.” The auctioneer is making an offer to sell to the highest bidder.

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8
Q

An offer creates the power of acceptance . . .

A

In the offeree

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9
Q

Ways To Terminate The Power Of Acceptance

A
  1. Lapse of time
  2. Death or incapacity of either party
  3. Revocation by offeror
  4. Rejection by offeree
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10
Q

Termination by Lapse of Time

A

An offer lapses after time stated

OR

After a reasonable time

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11
Q

Reasonable time determination is based on:

A
  1. Subject matter and market conditions
  2. Degree of urgency and means of transmission
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12
Q

Face-To-Face Rule

A

An offer made in a face-to-face convo generally lapses at the end of the convo

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13
Q

Revocation by Offeror

A
  • Offeror is free to revoke an outstanding offer,
  • terminating offeree’s power of acceptance,
  • at any time and for any reason,
  • so long as the revocation occurs prior to acceptance and is effectively communicated
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14
Q

Two ways to communicate revocation

A

Direct: offeror directly communicates intent to withdraw the offer

Indirect: offeror takes some action that is inconsistent with intent to go through with the offer

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15
Q

Rejection By Offeree

A
  1. Outright rejection
  2. Counteroffer – rejects the initial offer and creates a new offer
    • *Mere inquiry does not create a counteroffer
  3. Rejection via nonconforming acceptance
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16
Q

Revocation of an Offer Made to Multiple Offerees

A

Under the Second Restatements, where an offer is made by advertisement in a newspaper or other general notification to the public or some segment thereof, the power of acceptance is terminated when the notice of revocation is com- municated by advertisement or other general notification equivalent to that used for the offer and no better means of notification is reasonably available (the functional equivalents rule).

17
Q

Reviving An Offer

A

Offeror has the power to revive an offer that offeree has rejected or has lapsed

Offeror must communicate the revival to offeree:

(a) by language OR
(b) giving offeree more time to make a decision

18
Q

Unilateral Contract

A

Offer seeking performance in return

19
Q

When is a unilateral contract created?

A

When offeree completes performance

20
Q

Two Types of Unilateral Contracts

A
  1. Reward Offer
    • Offeror offers to pay a reward for the successful peformance of some act
  2. Real Estate Brokerage Agreement
    • Promise by the owner of real estate to pay a fee in exchange for the actual sale of the property
21
Q

When may offeror revoke a an option contract?

A

Before performance begins.

Once performance begins, an option contract is created.

22
Q

Bilateral Contract

A

Promosie in exchange for promise

MBE Contracts (13 decks)

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