1L Contracts- Mutual Assent

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jesdixon
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36715
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1L Contracts- Mutual Assent
Updated:
2011-08-30 18:18:26
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1L Contracts Mutual Assent
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Contracts- Mutual Assent (Offer and Acceptance)
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  1. What are the elements of a contract?
    • 1. Offer
    • 2. Acceptance
    • 3. Consideration
  2. Define Mutual Assent.
    Manifestation of a commitment to be bound to the agreement

    OBJECTIVE V. SUBJECTIVE THEORY

    • a) Objective/Majority –reasonable person’s interpretation of conduct (words and (Majority
    • Test)
    • ii) Manifestation of Mutual Assent (Actions, language)

    • b) Subjective/Minority- Actual intention of a party, “meeting of the minds”
    • i) Actual Mutual Assent present (thoughts, feelings)
  3. Define Offer
    Manifestation of intent to be bound
  4. Elements for an Offer.
    • 1. Communicated to Offeree
    • 2. Definite & Specific
    • (1) ID Offeree
    • (2) ID Subject Matter
    • (3) ID Price or Service

    iii) Reasonable

    • (1) Language
    • (2) Surrounding Circumstances
    • (3) Prior Practice and Relationship of the Parties
    • (4) Method of communication
    • (5) Industry custom
  5. 4 Terminations of an offer:
    i) Death or Incapacity of offeror

    ii) Lapse of time

    iii) Revocation- termination by offeror

    iiii) Rejection- termination by offeree

    (1) Outright rejections

    (2) Counteroffer—includes conditional acceptance
  6. What are the 4 irrevocable offers?
    (a) Option Contract

    (b) Detrimental Reliance

    (c) Firm Offer (UCC)

    (i) Applies only to:

    1. Merchants

    2. Goods

    (d) Unilaterial contract when performance began
  7. What's the general rule for advertisements?
    General rule: not offers but instead “invitations” to make an offer unless they are (1) clear, (2) pertain to a specific person/class, (3) reasonable
  8. Define acceptance
    Manifestation of assent to the offer
  9. What are the elements to acceptance for common law?
    3 elements to acceptance:

    i) Must be communicated to offeror

    ii) Timely

    iii) Must mirror the offer
  10. Mirror image rule
    Acceptance must mirror the offer; no more, no less. (Any variation will constitute as a counteroffer,which is a rejection of the original.)

    • i) Does NOT apply under
    • UCC Art. 2 sale/buying of goods by merchants
  11. Define mailbox rule.

    What are the exception?
    • Considered acceptance effective when its dispatched in the mail by the offeree, even
    • though it has not been communicated.

    ii) Exceptions:

    (1) Does not apply to rejections

    (2) Medium of acceptance must be reasonable and correct to offeror

    (3) Applies only when acceptance is properly stamped, addressed, etc.

    (4) Acceptance must be a mirror image

    (5) Does NOT apply when the offeror has stated (expressly or by implication) that he must receive

    (6) Does NOT apply to option contracts b/c the offer must be received before a certain time)
  12. Whats the general rule for silence/inaction and acceptance?
    Offeror cannot dictate silence as acceptance.


    • IE: “unless you respond w/I 10 days, you
    • will be deemed to have accepted my offer”
  13. Define bilateral contract.

    What constitutes acceptance?
    Promise for a promise

    Promise is acceptance
  14. Define unilateral contract.

    What constitutes acceptance?
    Promise for performance of an action or forbearance

    Acceptance= performance is complete

    MODERN v. CLASSICAL THEORY

    a) Modern Theory- Substantial Performance

    • An offeror may not revoke an offer where the offeree has made substantial
    • performance.
    • When the promisee performs, consideration is supplied...

    b) Classical Theory- Revocable at any time before full performance

    • Offeror can revoke his offer at a time which the offeree had commenced but not yet
    • completed the requested performance... The offeree is denied any remedy because
    • a contract was not created.
  15. Option Contract:
    Define and elements-
    • an agreement to hold an offer open for a
    • specified amount of time and is supported by consideration.

    • Offer contract is binding if: in writing and signed by the offeror, recites a purported consideration for the making of the offer, and proposes an exchange
    • on fair terms within a reasonable time

    1. Writing

    2. Signed by offeror

    • 3. Held open for a specified amount of
    • time….reasonable time

    • Cannot be revoked before the specified date; after
    • specified date not enforceable

    • 4. Recites
    • consideration-

    • a. Nominal
    • consideration is sufficient

    • b. If not supported by
    • consideration: is a mere offer, which may be withdrawn at any time before
    • acceptance.

    5. Fair terms

    • (iv) Mailbox rules does
    • not apply to option contract.

    *When an option contract is satisfied… don’t consider promissory estoppel
  16. Firm Offer
    2-205: Promise but no consideration by merchant

    OMG SAT

    • An OFFER
    • by a MERCHANT
    • to buy or sell GOODS
    • in a SIGNED WRITING
    • which gives ASSURANCE
    • for a reasonable TIME
  17. Detrimental reliance
    reliance upon an offer before acceptance

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