Formation of contracts Flashcards
Basic three elements to form a contract?
- Offer
- Acceptance
- Consideration
Formation of an offer
- Manifestation of an intent to enter into a contract
- Basic Offer
- Must have specific terms
- Basic Offer
Is an advertisement an offer?
No, it’s not specific enough. It’s an indentation to offer. But, it’s specific enough, it can be considered an offer.
Termination of the power to accept?
- Death of the offeror
- Lapse of time
- Revocation
- Rejection
- Counteroffer
How long will it take for a contract offer to lapse?
A reasonable amount of time or they will tell you
Revocation of contract
Offers are generally revocable until and if you accept
Indirect vs. Direct revovation
Indirect is when you know yore oir. You hear from someone else that is old it, you know im negotiating with others
Direct is when i tell you youre out
Irrevocable offer questions?
“I agree to leave the deal open for ___ amount of time”
Option contract? (Irrevocable offer)
- I make a promise to keep the offer open and there is consideration
- If elements are not there, then its just revocable
UCC firm offer rule?
- Promise to hold it open, writing signed by merchant
- How long will offer remain open?
1. Time stated. If no time stated maximum of three months.
2. What if it goes past three months?
1. Goes back to being revocable
Revocation Unilateral vs. Lateral contracts
- Unilateral
1. A promise to you for an act
2. I dont owe you any money until you perform
3. Once you begin to perform, my offer has become irrevocable - Promise for a promise
1. Promise back and forth
2. Your acceptance must match what i accept
Mirror image rule?
- your acceptance has to match what I offered to you
- If you I for a particular form of communication, you must accept using that communication
How does one accept an offer?
- Could accept by silence if thats okay under the circumstances
- Performance
- Mail box rule
Mailbox rule?
- If youre going to accept by mail, mailbox rule applies.
- Acceptance is effective when sent.
- What if you sent the rejection first, then the acceptance?
- Whichever shows up first wins
What if the terms haven been changed a little bit in a UCC contract?
It will not ruin the formation
When is a change in terms not okay for a UCC contract?
- When the terms will materially alter the contract
- OR the offeror objects within a reasonable time
- when the offer limits the way you can accept the contract
Consideration?
A bargained for exchange. Im giving up something, youre giving up something.
When is consideration not valid?
- Illusory promise
- Promise of a gift
- Past or morale consideration
Illusory promise?
I make an offer, but im not really promising anything
When the party making the offer makes the discretion for when they can perform
If it looks like an illusory promise but you leaving open possibility for you to perform, its okay
Promise of a gift?
- Gift is not valid consideration
- but you also cannot take a gift back
Past or moral consideration
Paying for past consideration is not consideration
Misc. Considerations?
- Promise to pay a debt barred by the statute of limitations
- Promise to pay the debt that been discharged by bankruptcy
- Forebearance to sue
1. I promise you I won’t sue you
Promissory estopple?
- Substitute for consideration
- I promise or day something to you that causes you to rely to your detriment and then say yeah i’m just kidding
1. Detrimental reliance
Accord and satisfaction?
- If theres no dispute to the debt, and i just pay you some of it, you can come back for the rest of it.
- If there is some sort of settlement, once they take the settlement money you are free and clear
- Debt collector guy
- If there is some sort of settlement, once they take the settlement money you are free and clear
