Mutual Assent Flashcards by Shelleah Jackson

What is another term for Mutual Assent?

“Meeting of the Minds”

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What is Manifestation Intent/Assent?

Objective manifestation of behavior based on the reasonable person standard

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What is Objective Manifestation of Behavior?

When courts look to the outward expression (actions/speaking) of an individual in determining if they manifested an intent to contract

Secret intent, or intent in the mind, is irrelevant

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What is the seminal case for mutual assent, and specifically, the concept that “secret” intent is irrelevant?

Lucy v. Zehmer
(guy “jokingly” contracts to sell his farm, court finds objective manifestation of behavior was enough to satisfy mutual assent)

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What is the Reasonable Person Standard with respect to mutual assent?

Would an objective, reasonable, third party witnessing a situation between the parties determine from their behavior that the parties demonstrated that they wanted to enter a contract?

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What are the 3 types of contracts?

Express/Explicit
Implied in Fact
Implied in Law

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What two elements are necessary for there to be an express/explicit contract?

Offer and Acceptance

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What is an Offer?

A clear, definite, and explicit statement that is an offer to contract

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If something is not clear, definite, or explicit, what is it, if not an offer?

An invitation

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What seminal case demonstrates an offer needing to be clear, definite, and explicit?

Lefkowitz v. Greater Minneapolis Surplus

guy shows up to buy fur coat for $1 because it was advertised in the paper; they hit him with the bait & switch

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Can an invitation be accepted?

No; if it’s not clear, definite, or explicit, it’s just an invitation, not an offer, and cannot be accepted

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What are preliminary negotiations and what case demonstrates this?

The discussions that precede an offer and are not prepared to be accepted

PFT Roberson v. Volvo Trucks

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What is Acceptance?

The moment the offeree accepts the offer

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Other than explicit/verbal acceptance, how can an offeree accept an offer?

Performance (party begins to perform on their end of the contract as proposed)
Silence as Acceptance (party accepts a contract when they’re silent)
Use of software/shrinkwrap acceptance (user utilizes software and accepts all terms)

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Which case demonstrates that performance on a contract is acceptance?

Fujimoto v. Rio Grande
(employees are upset about their payment, then they contract with employer that they’ll get a raise later, and don’t return the contract signed but begin to perform on the contract)

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What is the general rule regarding silence as acceptance?

Silence is NOT acceptance

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If the general rule of Silence as Acceptance is that silence is NOT acceptance, what are the 3 exceptions?

When the offeree takes the benefits of services they had reasonable time to reject
When the offeror has stated explicitly that they would accept silence as acceptance
When it’s reasonable to assume that an uninterested offeree would notify the offeror that they decline the offer

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What is the seminal case about shrinkwrap acceptance?

ProCd Inc. v. Zeidenberg
(by using the ProCD software, the guy was accepting the terms of the contract within the shrinkwrap; people accept terms after receiving the product all the time)

What is the acronym for terminating an offer, and what do they stand for?

L.I.R.R.

Lapse of Time
Incapacity/Death
Revocation
Rejection

What two conditions establish that a lapse of time terminated an offer?

When so much time has passed that an offer can be considered “expired” without ever having to formally revoke the offer

And when an offer doesn’t explicitly state a length of time it’s open (the assumption is a reasonable amount of time)

What is the general rule of revocation and which case demonstrates this?

An offeror can revoke their offer at any time prior to acceptance (Dickinson v. Dodds)

Which case illustrates that lapse of time can revoke an offer?

Loring v. City of Boston
(City offered a reward to help catch arsonists, but it expired after several years; plaintiffs can’t recover years later)

What are the three exceptions to the general rule of revocation (that an offeror can revoke their offer at any point prior to acceptance)?

Options Contract
Firm Offer Rule (UCC)
Partial Performance

What is an options contract?

When the offeree gives separate consideration to keep the offeror from revoking the offer and leaving it open for the entirety of a certain amount of time

What is the firm offer rule and which provision of UCC is it?

When a merchant is selling goods, a separate signed writing can guarantee that an offer from the merchant will not be revoked for a reasonable amount of time (not to exceed 60 days) § 2-205

The Firm Offer Rule is limited to three specific things needed for it to exist. What are they?

1. Goods 2. Must be between merchants 3. Must be a separate SIGNED writing

What is the rule surrounding partial performance and revocation?

An offeror can't revoke an offer when the offeree has already begun to meaningfully perform on the offer

What is the general rule about Rejection?

Once you accept, you can't turn around and reject, and once you reject, you can't turn around and accept

When an offeree rejects an offer, the original offer is gone unless:

The offeror gives a counteroffer (a new proposed offer)

What two things need to happen for an offeree to keep an offer open without actually rejecting it?

1. They say they're not rejecting the offer and will think about it 2. They must inquire as to if they would consider alternative terms

Is the Mirror Image Rule common law or the UCC?

Common Law

What is the Mirror Image Rule and which case illustrates it?

If the response to an offer is not the mirror image of the offer, it's a counteroffer Princess v. GE (GE's counteroffer was binding because Princess didn't reject their counteroffer and permitted the work to begin after receiving their terms)

What is the Mailbox Rule and which case illustrates it?

Manifestation of acceptance occurs once the acceptance is put in the mailbox and sent to the offeror Morrison v. Thoelke (Couple contracts to sell property from FL, once couple from TX put it in the mail, that was acceptance and they can't revoke at that point)

What is indefiniteness?

Vagueness/uncertainty will void a contract unless the parties behave as if they have a contract

Math formulas are sufficiently definite to resolve what? And which case illustrates this?

To resolve indefiniteness Rego v. Decker (couple with lease to own agreement had a math formula to calculate the rent)

What UCC section is the Battle of the Forms?

§ 2-207: Replaces Common Law Mirror Image Rule

What are the 3 major rules in the Battle of the Forms? (E.D/D.C.)

1. You don't have acceptance unless the party that makes the offer explicitly says that acceptance is conditional on their terms 2. Mirror image rule is out of the window unless the offeror has language that says they have to accept the different terms; party 2 who sends counteroffer determines the new terms unless 3 things 3. Conduct can establish the existence of a contract even when writings don't

If there's a Battle of the Forms and 2-207(2) does not apply, courts will (SALD)

Strike disagreements between the two contracts Adopt the terms both sides agree on Look at past course of dealings between parties and common use in the industry Default terms from the UCC will then be used

Who does 2-207 apply to?

Only to merchants

Which section of 2-207 typically applies most of the time?

Section 3 (Conduct/course of dealing can establish the existence of a contract even when writings don't)

This case illustrates the "modern shrink wrap" (software acceptance)

Meyer v. Uber

This case illustrates when a contract is Applied in Fact

Stepp v. Freeman | lottery ticket case, guy gets mad at coworker

What are the other 2 cases that demonstrates "Battle of the Forms"?

Kolek v. Gateway (guy buys a computer and claims arbitration clause didn't apply to him) Commerce v. Bayer (form 1 had no arbitration clause, form 2 had one, caused conflict)