Mutual Assent Flashcards
How do parties usually show mutual assent?
By OFFER and ACCEPTANCE
Define Offer?
A definite undertaking or proposal made by one person to another indicating a willingness to enter into a contact
Essential Elements for an Offer?
1) Terms must be communicated to offer
2) Serious Intent to Contract
3) Terms must be reasonably definite and enforceable
What are preliminary negotiations?
Statements indicating a willingness to enter in to a contract, not equivalent to an offer
How is Intent determined?
by an objective standard of what a reasonable person would have believed based on the words and conduct of the parties
Good faith
honest in fact in the conduct or transaction concerned
Commercial reasonableness
market price, or reasonable price made known by business persons
Output Contract
buyer agrees to purchase seller’s entire output for stated period
Requirement Contract
agreement of seller to supply a buyer with all his requirements for a stated period
Illusory promise
not enforceable promise “want” “wish”
Counteroffer
counterproposal from the offer that indicates willingness to contract but on different terms than originally offered
Conditional Acceptance
claims to accept offer but expressly makes acceptance conditional on the offeror’s assent to new terms
Offers will terminate after
1) Lapse of stated/reasonable time
2) Revocation
3) Rejection
4) Counteroffer
5) Conditional Acceptance
6) Death or incapacity of either party
7) Destruction of subject matter
8) Illegality
Option Contract
terms give assurance that an offer will be held open for a specified period of time
When is a contract formed?
Effective when acceptance is given
