Contracts 1 of 2 (33)

Question 1

Common Law Contract

Answer 1

An agreement between parties that may involve a promise for a promise (bilateral contract) or a promise for an act (unilateral contract) that, in order to be valid, must result from offer and acceptance with consideration and a lack of defenses. Common law deals with real estate and service type contracts.

Question 2

Termination of an Offer

Answer 2

The point at which an offer can no longer be accepted as a result of:

• Expiration—may be stated or will be after a reasonable period;
• Revocation—when offeror withdraws offer before acceptance;
• Rejection of offer by offeree;
• Counteroffer by offeree; or
• Operation of law as a result of the death or insanity of either party, destruction of the subject of the contract, or the illegality of the subject matter.

Question 3

Early Acceptance (Mailbox) Rule

Answer 3

An offer is considered to be accepted when the acceptance is transmitted or dispatched (mailed) by the offeree, unless provisions of the offer or the means of acceptance make it effective only upon receipt by the offeror.

Question 4

Acceptance Effective Upon Receipt

Answer 4

Circumstances under which acceptance of an offer is only effective when received by the offeror, such as when the offer specifies acceptance is only valid upon receipt, or requires receipt by a specific date; when acceptance is by an unauthorized means, such as acceptance by mail when the offer specified fax; or when an offeree submits both a rejection and an acceptance, in which case the one received first would be effective.