Formation of Contracts (Lesson 5.2) Flashcards
What are the essential elements required to form a valid contract?
The parties must agree on all essential elements of the contract.
Sale contract: item + price
Lease contract: item + term + rent
What makes an offer valid?
It must state all essential elements, allowing the offeree to** accept or reject it**.
What is a determinant vs. indeterminant offer?
Determinant: directed at a specific person.
Indeterminant: made to the public at large (e.g., “I’ll pay 50¢ for a pen”).
Is an advertisement an offer?
No, it is a solicitation of offers — unless made by professional sellers, who may have special obligations under the Consumer Protection Act.
What happens when an offer includes a term?
The offer cannot be withdrawn during that term.
What happens if no term is stated?
The offer can be withdrawn anytime before acceptance, or it will lapse after a reasonable time.
What causes an offer to lapse?
Expiration of the term
Rejection by the offeree
Passage of a reasonable time without acceptance
What are the two types of acceptance?
Express: clear verbal or written agreement
Tacit: acceptance by actions indicating agreement (e.g., handing over an item)
What does silence mean in contract law?
**Silence is not acceptance — it is considered a refusal, unless paired with clear action.
Where is a contract formed when parties are in different cities?
Where the offeror receives the notice of acceptance — this determines the** jurisdiction**.
What is a counteroffer?
A refusal of the original offer and a new offer in its place.
Original offer is no longer open after a counteroffer is made.
