An agreement is the essence of every contract. The parties to a contract are the offeror (who makes an offer) and the offeree (to whom the offer is made). If, through the process of offer and acceptance, an agreement is reached, and the other elements are present (consideration, capacity, legality), a valid contract is formed.
1. Mistress Miller offers her first born child to Rumpelstiltskin, in return for a pile of gold. Miller says, “I promise you faithfully that I will leave the offer open for a week.” Three days later, before Rumpelstiltskin has made up his mind, Miller sells her baby to Cinderella, who is unable to bear children of her own. Assuming it is legal to sell children, was Miller entitled to revoke her offer to Rumpelstiltskin?
2. Napoleon and King George are dividing up the New World. “I offer you Delaware and Massachusetts for $50,000,” George writes to Napoleon. Napoleon writes back, “Throw in New York and you got a deal.” Is there a contract?
3. Butcher phones Jack, and offers to sell Jack a handful of magic beans in return for a cow. Jack says, “I don’t know,” and Butcher responds, “Well, call me and let me know your decision.” Jack mails his acceptance to Butcher the following day, and Butcher receives it three days later. When is Jack’s acceptance effective?
4. The Lucrezia Borgia Exterminating Company decides to buy rat poison from the Rodent-A-No Manufacturing Company. Rodent-A-No sends out its list of terms (price, shipping, etc.) and Borgia wires back, “We will order most of our rat poison from you for the next year.” Is there a contract?
The elements of an agreement are an offer and an acceptance --one party offers a bargain to another, who accepts.
A.REQUIREMENTS OF THE OFFER
An offer is a promise or commitment to do or refrain from doing a specified thing in the future. An offer has three elements: 1. Intention
The offeror must intend to be bound by the offer.
a. Agreements to Agree
Agreements to agree to a material term of a contract at some future date may be enforced if the parties clearly intended to be bound. 2.Definiteness
All of the major terms must be stated with reasonable definiteness in the offer (or, if the offeror directs, in the offeree's acceptance). 3.Communication
The offeree must know of the offer.
1. One morning, when Jane’s new car – with an $18,000 market value – doesn’t start, she yells in anger, “I’d sell this car to anyone for $500.” If you drop $500 in her lap, is the car yours?
2. Rick, the president of Pye Corporation, announces to Pye employees that "if you work hard, and profits remain high, you'll get a bonus, if management thinks it's warranted." Profits remain high, but no bonus is paid. If the employees sue, would a court enforce the promise?
B.TERMINATION OF THE OFFER
1.Termination by Action of the Parties
a.Revocation of the Offer
The offeror usually can revoke the offer (even if he or she has promised to keep it open), by express repudiation or by acts that are inconsistent with the offer and that are made known to the offeree. 1)Communicated to the Offeree
A revocation becomes effective when the offeree or offeree's agent receives it. 2)Offers to the General Public
An offer made to the general public can be revoked in the same manner the offer was originally communicated. b.Irrevocable Offers
1)When an Offeree Changes Position in Justifiable Reliance The...