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28 Cards in this Set

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  • Back
Contract- A contract is an agreement between two parties which the law will enforce.

OFFER + ACCEPTANCE + CONSIDERATION = BINDING CONTRACT

Offeror: party making the offer & is the master of the offer & can make offeree accept in any way-
Offeree: party to which the offer is being made to(this part must accept)
O + A + C= K
a- Offer + Acceptance = Mutual Assent
b- For an enforceable contract
c- There needs to be acceptance through words or conduct
d- Needs to be a meeting of minds of all or both parties to contract
e- Each Party agrees to all the terms and conditions with a same sense and same meaning as others
f- If a persons words and acts just by an objective standard manifests an intention to contract, it is immaterial what may be the real but unexpressed state of his mind.
Lucy v Zehmer (bar case with land & wife)
Mutual Assent
a manifestation of willingness to enter into a bargain that justifies anothers understanding that assent to it is invited and will conclude it.
OFFER
1- Be communicated to the offeree
2- Demonstrate a commitment to contract by the offeror
3- Be in definite terms
C.C.D. (Elements)

Communicated. Committed. Definite.
Whether an offer has been made is judged by an objective standard- would a reasonable person in the position of the offeree believe that an offer has been made.. if yes →offer is possible

Offer can be either EXPRESS (orally or in writing) or IMPLIED (actions)

Statements of opinion or intention are not offers unless the statements are so specific that the reasonable offeree would believe that an offer has been made.

Social engagements are NOT enforceable. AND Contracts between spouses are not enforceable (unless equal to selling something/contracting with a stranger AKA “COMMERCIAL”)

If contract states- “not enforceable” or “not binding” or any such language it will not be considered an enforceable contract. This is usually an “estimate”
Consideration is something with monetary value-
Social engagements are NOT enforceable.
OFFER **NOTES**
a- Do NOT create a contract because the parties have not yet mutually agreed-
b- A contract is formed when all the terms that the parties themselves regard as important have been negotiated.
(to determine if is ONLY negotiation ask: how did the parties conduct themselves? What words were exchanged? Have the parties had prior dealings? What are the customs/practices of the trade?
Preliminary Negotiations
are binding contracts unless the parties did not intend to be bound until there was a written document
Oral Agreements
1- If contract is of a class usually found to be in writing
2- If whether it is a type needing formal writing for its full expression
3- If it has few or many details
4- Whether the amount is large or small
5- Whether the contract is common or unusual
6- Whether all details have been agreed upon on or some remain unresolved.
7- Whether the negotiations show a writing was discussed or contemplated.
7 Different Factors in Courts determining in whether the K needs to be in writing or is oral sufficient
Advertisements- The general rule is that advertisements are NOT offers- they are only solicitations because they lack the specifics required to be an offer and the one placing the ad could not intend to be bound by all potential buyers

EXCEPTION: if the ad contains all necessary specifics and indicates who may accept.
Advertisements
Contract which involves an exchange of the offeror’s promise for the offeree’s act. THERE IS NO CONTRACT until the required performance is DONE. (JUST DO IT) but when act is begun reasonable time is allowed to complete it

Ex. I promise to give you $1 to run around Cooley naked.
Unilateral Contract
Contract where BOTH sides make promises- (promise for a promise) There is a contract as soon as the offeree makes the required promise. In case of doubt pick BILATERAL instead of unilateral.
Bilateral Contract
Acceptance- Manifestation of assent by the offeree made in the manner invited or required by the offeror. It may be a promise, performance, or sometimes silence
ACCEPTANCE
1- Communicated to the offeror
2- Absolute and unequivocal
3- Responsive to the offer
ACCEPTANCE (3 Elements)

C.A.R.
Communicated. Absolute. Responsive.
1- Acceptance of an offer- is manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer. ***offeror is the master of his offer and may prescribe a method which the offer may be accepted. If only that method will do, there is no acceptance until that action is done. *** If the offeror does not specify a mode of acceptance a reasonable method will be accepted.
2- Acceptance by performance- requires that at least part of what the offer requests be performed or tendered and includes acceptance by performance as a return promise.
3- Acceptance by promise- requires that the offeree complete every act essential to the making of the promise.

If the offer does not make it clear whether an acceptance is to occur through promise or performance, the offeree may accept by either promise or performance
3 Ways to accept an offer as stated in Restatement 50
The general rule is that silence is NOT acceptance UNLESS the offeree takes the benefit knowing that the offeror expected compensation and the offeree knows or has reason to know that silence or inaction will act as acceptance; or the previous conduct of the parties would require the offeree to notify the offeror if they were NOT accepting the offer.

If a party voluntarily accepts without stopping services rendered for his benefit when he has the option to reject them even if it wasn’t his idea or request a promise to pay may be inferred.
Silent acceptance
***Reward offers from private citizens (lost dog) can only be accepted by those who knew the reward offer BEFORE the required act was done. Generally this does NOT apply if the reward is offered by a government agency. The persons motive for accepting an offer is irrelevant as long as it’s done voluntarily.
Reward offers
An offeree’s power of acceptance is terminated by the non-occurrence of any conditions of acceptance.


1- Revocation of the offer by the offeror- by the offeror or a reliable 3rd party
2- Lapse of time- when counting days the offer day does NOT count- &reasonable time is 3 months.
3- Death or incapacity-terminates it at time of death NOT when offeree learns of death.
4- Offeree’s rejection or counteroffer

In addition offeree’s power of acceptance is terminated by the non-occurrence of any condition of acceptance under the terms of the offer.
Termination of Power of Acceptance
(4 Conditions)
the General Rule is an offeror is free to revoke an offer any time before it is accepted. If buyer knows about the revocation before he accepts the offer, there is no acceptance.
Revocation
1- Direct revocation- offeree learns of the revocation directly from the offeror.
2- Indirect revocation (revocation by 3rd party)- offeree learns of the revocation from a third party- (information from the third party must be reliable
2 Types of Revocation
An offer can’t be terminated after it has been accepted otherwise it is a breach of contract. Unless it is an option contract which can ONLY be a unilateral contract.
b- Offeree has to have reliable information of the offer from an indirect source the offer is revoked, if they are told by the 3rd party that there is now an agreement with another buyer the offer is revoked.
c- Offeror has up to the very moment the offer is accepted to reject his offer.(offeror never opened the door for the offeree and told him the offer was revoked before P could tender the money it was effectively revoked.
Revocation of Acceptance
1- If written & signed – Offer cannot be withdrawn till the date stated---if there is no time stated 3 months maximum-OFFEROR MUST BE A MERCHANT & it must be a written and signed offer—in oral conversations the offer is terminated at the end of the conversation unless otherwise stated.

If there is consideration on the offer the offeror cannot withdraw his offer till a time specified or a reasonable period of time.

Exception- Firm Offers under the UCC 2-205 - If a merchant gives a signed, written assurance to hold an offer open, it is irrevocable for the stated period of time or if no time is stated, for a reasonable time, but NEVER longer than 3 months
Firm Offer Rule
- the offeror sets a time limit for acceptance & at the end of this time limit the power of acceptance automatically terminates. Face to face or telephone offers end when two parties walk away or hang up. Power of acceptance continues only during conversation unless here is evidence of contrary intent. If the offeror does not set a time limit for acceptance-the power of acceptance ends after a “reasonable time period” (no longer than 3 months)
Lapse of time [Restatement 41]
If the offeror or offeree dies before an offer is accepted, the offer is revoked UNLESS it is an option contract. If the offeror or offeree becomes incapacitated before an offer is accepted, the offer is also revoked unless it is an OPTION contract.
Death or Incapacity
it is effective upon arrival-- If an offeree rejects the offer given by the offeror then there is no contract. A manifestation of intention NOT to accept an offer is a rejection unless the offeree manifests an intention to take it under further advisement. EXCEPTION: If the offeree “buys/pays” for time for an option contract, they have until the option period expires to accept even if the they rejected they can still come back and accept it if it is within the time period unless the offeror relied on the rejection and contracted with someone else.
Offeree’s Rejection- [Restatement 38]
Merchant- a person who deals in goods of the kind or otherwise by his occupation hold himself to having more knowledge or skill peculiar to the practices of goods involved in the transaction.

Goods- all moveable things

Signed- includes any symbol executed or adopted by a party with present intention to authenticate writing.

Writing- includes printing, typewriting, or any other intentional reduction to tangible form.
U.C.C. Definitions
is created when the offeree has given the offeror something in exchange for the offeror’s promise to keep the offer open for the period of time agreed upon
Option contract
Mirror Image rule- has to be exactly the same- been loosened quite a bit. – Offeree sent back offer attempting to lower price-offeror responded with I cannot lower the price-courts ruled that this was a renewal of the offer and offeree could accept accordingly
Counteroffer under Common Law
(Mirror Image Rule)
the only exception to having a contract be communicated immediately in order to form a contract.

Unless the terms of the offer require receipt to accept, the offerees acceptance of an offer is effective upon mailing.

Rejections and revocations are effective upon receipt.

The mailbox rule does not work for option contracts, acceptance must be received in the offerors hands within the option period for the acceptance to be effective.
The “Mailbox Rule”