Module 7 - Agreement

Question 1

What is an agreement

Answer 1

A meeting of two or more minds in regard to the terms of a contract

evident by two events: an offer and acceptance

Question 2

an agreement has to be in writing T/F

Answer 2

False

Question 3

Offer

Answer 3

A promise or commitment to perform or refrain from performing some specified act in the future.

Question 4

What re the three elements necessary for an offer to be effective?

Answer 4

1. Serious Intent
2. Terms are Reasonably Certain or Definite
3. The offer must be communicated to the offeree

Question 5

What is intent judged by?

Answer 5

what a reasonable person in the offeree’s position would conclude that the offerors words and actions meant

Question 6

what does serious intent mean

Answer 6

that the parties must intend to form a legally binding agreement

Question 7

What are common statements that are not offers

Answer 7

• just stating opinions
• statement of future intentions (I might do this)
• a statement made in anger or frustration
• preliminary negotiations

Question 8

What is Revocation

Answer 8

offeror act of revoking/withdrawing an offer without liability

*can be revoked at any time before acceptance unless it’s irrevocable

Question 9

when does a revocation become effective?

Answer 9

when the offeree receives it

offeror sends revocation in mail on june 1st but when it is recived on June 3rd is when its official

Question 10

What are irrevocable offers?

Answer 10

option contract

Question 11

what is an option contract?

Answer 11

An option contract is created when an offeror promises to hold an offer open for a specified period of time in return for a payment (consideration) given by the offeree.

Question 11

Rejection

Answer 11

an offeree rejects the offer by words or conduct making the offer terminated

Question 12

counteroffer

Answer 12

An offeree’s response to an offer in which the offeree rejects the original offer and at the same time makes a new offer.

Question 13

what is the mirror image rule

Answer 13

a common law rule that says an acceptance must mirror the offer, you cannot vary terms of an offer and any change in terms is considered rejection and a counteroffer

Question 13

Otherwise to terminate a offer (Terminate it by law)

Answer 13

Lapse of Time

Destruction of Subject Matter

Death or Incompetence

Illegality

Question 14

What is the lapse of time rule in terms of a way to terminate an offer

Answer 14

An offer terminates automatically by law when the period of time specified in the offer has passed if not its a reasonable period of time

Question 15

what happens to an offer if the subject matter is destroyed or the offeror dies

Answer 15

it is terminated by law unless it is unrevokable

Question 16

any illegal offer is…

Answer 16

automatically terminated

Question 17

what are the methods by which an offer can be terminated by the actions of the parties?

Answer 17

• revocation
• rejection
• counteroffer

Question 18

what are the methods by which an offer can be terminated by the operation of law

Answer 18

• lapse of time
• destruction of subject matter
• death
• Illegal

Question 19

acceptance is…

Answer 19

a voluntary act by the offeree shows agreement to the terms of an offer

Question 20

Can an acceptance impose new conditions or change the terms of the original offer?

Answer 20

NO has to be unequivocal

Question 21

“I accept the offer but only if I can pay on ninety days’ credit” is an example of…

Answer 21

not an unequivocal acceptance making it a rejection of the original offer and turning it into a counteroffer

Question 22

What does unequivocal acceptance mean?

Answer 22

the mirror image rule applys

Question 23

What are the instances where silence or inaction is an acceptance

Answer 23

- The offeree has had prior dealings with offeror - acts consistent with acceptance - Unilateral contract (offer is accepted by performance)

Question 24

What is the mailbox rule?

Answer 24

tiebreaker when an offer is accepted and revoked at thed same time Rule 1: acceptance is effective upon dispatch (moment you let it go) Rule 2: Revoking the offer is effective when the other party receives it

Question 25

What is a promissory Estoppel

Answer 25

legal term when a promise is made and it is clear definite, justifiable, and substantial enough that it can be enforced

Question 26

What terms must an offer express or have be inferred from it

Answer 26

1. Identify the parties 2. Identify the subject matter 3. Determine consideration 4. Timing of payment and performance

Question 27

an offer can be terminated by what two ways

Answer 27

- actions of the parties - operations of law

Question 28

Which contract needs communication for acceptance -Bilateral or Unilateral

Answer 28

bilateral because acceptance is in form of a promise not an act