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What are the elements of a contract?
- 1. Offer
- 2. Acceptance
- 3. Consideration
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
- 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)
Manifestation of intent to be bound
Elements for an Offer.
- 1. Communicated to Offeree
- 2. Definite & Specific
- (1) ID Offeree
- (2) ID Subject Matter
- (3) ID Price or Service
- (1) Language
- (2) Surrounding Circumstances
- (3) Prior Practice and Relationship of the Parties
- (4) Method of communication
- (5) Industry custom
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
What are the 4 irrevocable offers?
(a) Option Contract
(b) Detrimental Reliance
(c) Firm Offer (UCC)
(i) Applies only to:
(d) Unilaterial contract when performance began
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
Manifestation of assent to the offer
What are the elements to acceptance for common law?
3 elements to acceptance:
i) Must be communicated to offeror
iii) Must mirror the offer
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
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.
(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)
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”
Define bilateral contract.
What constitutes acceptance?
Promise for a promise
Promise is acceptance
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
- 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.
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
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
- a. Nominal
- consideration is sufficient
- b. If not supported by
- consideration: is a mere offer, which may be withdrawn at any time before
5. Fair terms
- (iv) Mailbox rules does
- not apply to option contract.
*When an option contract is satisfied… don’t consider promissory estoppel
2-205: Promise but no consideration by merchant
- An OFFER
- by a MERCHANT
- to buy or sell GOODS
- in a SIGNED WRITING
- which gives ASSURANCE
- for a reasonable TIME
reliance upon an offer before acceptance