Contract Formation (OFFER and ACCEPTANCE)

Question 1

What are the requirements to form a valid contract?

Answer 1

A valid contract is formed when there is:

1) mutual assent (an offer and acceptance of that offer by the other party);
2) adequate consideration or a substitute; AND
3) no defenses to formation that would invalidate an otherwise valid contract entered into by the parties.

Question 2

What is mutual assent?

Answer 2

Mutual assent to enter into a contract requires

1) an offer by one party; AND
2) acceptance of that offer by the other party.

Question 3

What is an offer?

Answer 3

An offer is:

1) a manifestation of intent to contract by one party,
2) with definite or reasonably certain terms,
3) that is communicated to an identified offeree.

Question 4

What is acceptance?

Answer 4

Acceptance is a manifestation of assent to the terms of the offer, which indicates a commitment to be bound.

Question 5

How can an offer be terminated?

Answer 5

An offer can be terminated before acceptance by:

a) rejection or counter-offer by the offeree;
b) lapse of time;
c) revocation by the offeror; OR
d) death/incapacity of either party.