Creation of a Contract Flashcards
Mutual Assent
Objective measure of the parties’ apparent intention that they manifested to the other
Meeting of the minds
Offer
Must create a reasonable expectation that the offeror is willing to enter into a contract on the basis of the offered terms
- Promise, undertaking, or commitment to enter into a contract - INTENT to enter into a contract
- Certainty and definiteness in essential terms
- Communication
Broad Communications
The broader the communicating media, the more likely it is seen as merely the solicitation of an offer
Exception: reward offers
Advertisements
Usually construed as mere invitations for offers
CAN BE OFFERS IF:
- Language can be construed as containing a promise
- Terms are certain and definite
- Offeree(s) is clearly identified
Definite and Certain Terms
- Identity of the offeree
- Subject matter
- Price to be paid
As long as it contains some *objective standard& for the court to use to supply the missing terms
Real Estate Transactions
Must identify the land with some particularity and price terms
Ex: My house in Erewhon
Sale of Goods
Quantity being offered must be certain or capable of being made certain
Quantity Cannot Be Unreasonably Disproportionate
May not be a tender of or a demand for any quantity unreasonably disproportionate to
- Any stated estimate or in the absence of a stated estimate
- Any normal or otherwise comparable prior output or requirements
Employment and Other Services
If the duration of the employment is not specified, the offeror, if accepted, is construed as creating a contract terminate at the will of either party
For other services, the nature of the work to be performed must be included in the offer
Missing Terms
Court can supply reasonable terms if parties intended to make a contract and there is a reasonably certain basis for giving a remedy
Price
Price will be a reasonable price at the time of delivery if:
- Nothing is said as to price
- Price is left to be agreed to by the parties and they fail to agree; or
- Price is to be fixed by some external factor or third party and it is not so set
Contract can be formed even if parties agree one party will fix price in the future - if party does not fix in good faith, the other party may either cancel contract or fix a reasonable price themself
Time
If no specified time, it is to be performed within a reasonable time
Vague or Ambiguous Terms
Not an offer at common law or under UCC
Ex: an agreement to divide profits “on a liberal basis” = too vague
Ex: an agreement to purchase a parcel of land for “$8,000 or less” = too vague
Vagueness Cure
When part performance supplies the needed clarification of the terms, it can be used to cure vagueness
Uncertainty Cure
If uncertainty results because the offeree is given a choice of alternative performances, the offer becomes *definite when the offeree communicates her choice
Terms to Be Agreed on Later
If term is material, the offeree is too uncertain
Article 2 permits a reasonable price term to be supplied by the court if the other evidence indicates that the parties intended to form a contract
Knowledge
Proposal of offer must be communicated to offeree so that they have knowledge of the offer
