Contracts I Flashcards
Elements of a binding and enforceable contract
- An offer made and accepted
- Mutual intent to enter into the contract
- Consideration
- Capacity to contract
- Lawful purpose
What is an irrevocable offer?
An offer that cannot be taken back. Usually used in tendering process.
What is an option contract?
Right to accept the offer is preserved until offeree decides to take it.
Ex. In house buying with inspection. You can revoke offer if home doesn’t meet inspection.
Timing of accepting an offer
When received by post office.
When offeror receives acceptance notification.
Timing of revoking an offer
When offeree receives notice of revocation
Governing law
The place where offer of acceptance becomes effective.
Letter of intent
Not enforceable. There is no agreement yet. Although it can become an agreement if sufficiently detailed.
Consideration
Doesn’t have to be money
Seal and irrevocable offers
an “irrevocable” offer made WITHOUT consideration is a “gratuitous promise”.
It can be withdrawn.
Equitable Estoppel
Prevents a party from being harmed by another’s voluntary conduct.
If a party is damaged by relying on a gratuitous promise, they will be favoured.
Capacity
Parties must have the necessary capacity to enter into a contract.
Legality
Contracts cannot break any laws
Statute of Frauds
Some contracts must be in writing
ex. Land
