Formation Flashcards
Implied in fact K
Consensual agreement that does not express all the terms.
Eg. Agree to pay reasonable price
Requirements for valid K
- Offer
- Acceptance
- Consideration
- Legal capacity of the parties
- A legal objective
Implied in law K
Equitable determination that one party bestowed a benefit on the other that the other is then obligated to pay for.
AKA: Quasi K or restitutionary obligation. Eg. Dr. Does emergency surgery on unconscious patient.
Auctions as offers
Auctioneer is inviting offers.
A bid is an offer.
accepts by accepting the bid.
Without reserve bid is when auctioneer is making offer to sell to highest bidder. Bidder accepts by making bid.
Requirements for offer
Outward manifestation that signals that acceptance will conclude the deal.
Terminating offer
- Lapse of time
- Death or incapacity of either party
- Revocation by offeror
- Rejection by offeree
Responses to offer
- Accept
- Reject
- Counteroffer
- Inquiry
- Offeror can revoke
Revocation by offeror
Free to revoke any time for any reason prior to acceptance being effectively communicated.
* Even if he promised to leave the offer open.
Death or incapacity
If either party is incapacitated between offer and acceptance, then the power of acceptance is terminated.
Option K
Prohibits offer from being revoked. Need:
- Offer
- Promise to keep offer open, and
- Consideration.
Functional equitable rule
Offer advertised in newspaper can be revoked at any time by advertising the revocation.
Offeree can no longer accept even if does not know of revocation.
Construction K
Implied K created when general contractor relies on subcontractors bid to make his proposal even though sub made no promise to keep bid open.
Firm offer
Under UCC,
- irrevocable offer
- by merchant
- In signed writing
- Expressly states that the terms are held open.
Counteroffer
Rejects the original offer and makes a new offer to which acceptance will bind the agreement.
Mere inquiry about the offerors willingness to negotiate terms will not reject the offer.
Acceptance requirements
- Must mirror the terms of the offer (a change may be considered a counteroffer)
- Must be communicated to the offeror.
Unilateral K
Where performances by offeree is acceptance. -Performance binds offeror to terms and he can no longer revoke.
Eg. Offer of reward money for info.
Silence as acceptance
- Offeree has reason to know offerors intent and accepts the benefit of his services.
- When offeror states silence is acceptance
- Previous dealings will allow offeror to reasonably think the terms are acceptable,offeree has to speak up to not have silence as acceptance.
Mailbox rule
FL
Acceptance under options K occurs when offeror receives it, not when offeree mails it.
(Florida rule)
UCC acceptance
Mirror image rule not apply under UCC if
- Non conforming goods or
- Battle of the forms.
Conforming acceptance under UCC
When consumer is a party
The additional or changed terms are an offer that can be rejected.
Acceptance under the UCC
When both parties are merchants
Additional terms are considered part of the K unless
- Offer expressly limits acceptance to terms of the offer,
- Additional terms materially alter the K,
- Offeror objects to additional terms within a reasonable time.
Mailbox rule
Acceptance effective when mailed, not when received.
* but if rejection sent, then change I mind and send acceptance, whichever is received first by offeror is binding.
