Offer & Acceptance Flashcards
In order to create a contract, you must have
*
parties capable of forming a contract
consent
lawful object for contract
consideration
Offer
manifestation of willingness to enter into a bargain made to justify to another person in understanding that assent to bargain is invited and will conclude it
Assent
3
looks at the words and circumstances
to decide of a reasonable person would have understood
intent to be bound
Certainty
4
looks at whether terms are reasonably complete
states requirements for breach
states nature of remedy for breach
leaves nothing unanswered
For complete certainty in an oral agreement, must be able to
have Offeree say “I accept” and there be nothing at all left in question.
Best defense for a CERTAINTY argument
PRELIMINARY NEGOTIATIONS which state an intent to put in writing.
Good case for CERTAINTY defense in Oral Contract rebuttal
ROBERSON said each agreed upon clause is not a stand alone contract, especially when type of agreement is normally in writing, or too complicated to have only in oral form
negotiating with Scott, wanted phone call to be enforceable
Communication of offer requires that
Offeree knows offer existed prior to accepting
example: advertisement or reward notice
INTENT TO BE BOUND looks at
writing typically required/expected
level of detail, size
commonality of nature of agreement
full understanding of the terms
ROBERSON
Offers can be _________ or _________.
Define each.
Express or Implied
Express is clearly stated in oral or written form
Implied is constructed from the actions and circumstances where a reasonable person would also conclude that contract exists
Offers are interrupted by
death incapacity revocation rejection lapsed response time mailbox rule conditions
Acceptance is
manifestation of assent by Offeree
in manner required by offer
by performance (acting as a return promise) or
by promise (requiring all essential acts be completed)
Acceptance can create two types of contract
Define
Unilateral - promise for performance
Bilateral - promise for promise
Explain how partial performance works in each contract type
In UNILATERAL, part performance creates an irrevocable contract upon significant completion of the required task
In BILATERAL, part performance can create an irrevocable contract on instances of payment of deposit or temporarily under an option contract
What do we look for to determine the type of contract at issue?
the behavior of the parties and the circumstances
What is the court policy toward partial performance?
Court wants to encourage fairness in dealings, so will enforce when significant acts have occurred to effectuate the contract
What are the acceptance requirements for an Arbitration Clause?
(5) & why
because an arbitration clause is a waiver of a constitutional right to a jury trial, acceptance must be made
voluntarily knowingly intelligently deliberately with full knowledge of consequences
Give a case example for Arbitration Clause
Kortum-Managhan
What are acceptance requirements for Adhesion Contract?
(8) & why
because this is acceptance by silence, the court must ensure that the terms are reasonably expected and not unduly oppressive, unconscionable, or against public policy.
- no duress
- change not hidden
- terms not ambiguous or misleading
- party with greater bargain power not abusing power
- no undue external pressure on weaker party
- change is signed and initialed (preferably)
- weaker party had opportunity to obtain counsel
- party with greater power cannot lull weaker party with promise not to enforce.
What are acceptance requirements for silence as acceptance?
3 type
With History:
(1) show history of past dealings that show silence was permitted as acceptance
Without History:
(2) show party was examining product for sale and committed conversion act, is deemed contract to pay unless demanded payment is unreasonable.
(3) show party had knowledge of work, knowledge he would receive material benefit, and failed to state objection. passively accepting benefit establishes obligation to pay.
Give a case for SILENCE AS ACCEPTANCE
Day v. Caton - building the wall
Explain Mirror Image Rule.
acceptance of an offer must comply with the requirements of the offer as to the promise or performance deliverable.
What are the ways that Power of Acceptance are Terminated?
5
(1) an Offeree’s power of acceptance may be terminated by
(a) rejection or counteroffer of Offeree
(b) lapse of time
(c) revocation by Offeror
(d) death or incapacity of a party
(2) Also by lack of any condition of acceptance required by the offer
What has to be communicated and how to terminate an offer?
termination occurs when the Offeree receives reliable information that the offer is void, from Offeror or his agent, OR when Offeror takes definite action inconsistent with completing the offer.
Made Irrevocable by
Partial Performance
(1) unilateral contract with significant completion
(2) bilateral contract with downpayment
Present Intent and Ability to pay in full (Dickinson)
Option Contract irrevocable until option time expires
Rejection by
Communication
(1) clear and unambiguous (intent to consider is not rejection)
(2) actions clearly against intent to agree
Counteroffer
(1) same subject matter
(2) material change to offer is a substitute bargain
(3) can add clarifying terms reasonably expected
Lapse of Time
(1) within express time set
(2) within reasonable time in line with circumstances and purpose of offer
(Loring v. City of Boston - arson)
Mailbox Rule
acceptance occurs the moment the acceptance is placed in the mailbox (Morrison v. Thoelke)
(1) if sent prior to receipt of notice of revocation
Exceptions to Mailbox Rule
(1) if Offeree first mailed rejection then changed their mind and mailed acceptance
(a) no contract if rejection received by Offeror first
(b) contract if acceptance received by Offeror first
(c) if both received at same time, Offeror chooses
