Formation

Question 1

Contract

Answer 1

A contract is an agreement between two or more parties which the law will enforce.

Question 2

Elements of a Contract

Answer 2

The necessary elements of a contract are offer, acceptance, and consideration.

Question 3

Mutual Assent

Answer 3

Mutual assent relates to the requirement that the parties agree to enter into a contractual relationship, including terms and conditions. It is usually proved by showing that one party made a valid offer and the other party made a valid acceptance.

Question 4

Meeting of the Minds

Answer 4

The historic rule holds that mutual assent exists if there was a “meeting of the minds” between the parties, meaning that the parties subjectively intended to enter into a legally binding contract and agreed to the terms and conditions of the contract.

Question 5

Objective Theory of Contracts

Answer 5

The modern rule holds that mutual assent exists if a reasonable person would objectively have understood the outward actions and statements of the other party to indicate an intent to enter into a legally binding contract and agreement to terms and conditions of the contract.

Question 6

UCC Formation

Answer 6

Under the UCC, a contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such contract. Additionally, under the UCC, a contract for sale may be found even though the moment of its making is undetermined.