Contracts Study Guide

Topics: Contract, Contract law, Contractual term Pages: 14 (10717 words) Published: October 31, 2014
Steven Thel Fall 2012 Contract An oral or written agreement between two or more people, an exchange relationship, at least one promise, enforceable. Mutual Assent each party must intend to enter the contract and must agree to do so on mutually agreeable terms. Assent is legally sufficient if each party, by the deliberate use of words or conduct, manifests agreement to be contractually bound. Lucy v. Zehmer joke and intoxication was not enough to get Zehmer out of a contract that Lucy took seriously. Offer Acceptance Offer creates a power of acceptance in the offeree so that she can bring the contract into existence. A counter offer will terminate/reject the original offer and create a new offer RS24 An offer is a manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it. Offer must convey a reasonable understanding that the offeror intends a contract and not merely a proposal to contract RS 40 face to face conversation when an offer is made the acceptances must occur before the close of the conversation and no contract is made unless there is an indication that the offer is intended to continue beyond the immediate circumstances When an offer terminates RS36 Silence/inaction cannot constitute acceptance Cannot reject and then accept that would be a counteroffer of sorts A counteroffer terminates an offer Offerors death or mental disability before acceptance terminates offer Offeror can revoke at any time before acceptance, unless there is an option to keep the offer open (notice required) Indirect revocation if the offeree finds out from 3rd party that the offer has been revoked (Dickenson v. Dodds after Dickenson found out Dodds sold the offered property to another he communicated his acceptance but was too late) RSC 42 Power of acceptance is terminated when offeree receives manifestation of intention not to enter into proposed contract RS 43 power of acceptance is terminated when offeror takes action inconsistent with an intention to enter into proposed contract and offeree acquires reliable information to that effect After some reasonable amount of time termination occurs as well. Mirror image rule requires that the acceptance exactly matches the offer modern trend is to only treat material altercations as violating the mirror image rule. Price is a material alteration a mere request to modify the terms may keep the offer open without rejecting and proposing a new counteroffer i.e. Thanks for your offer. Would you accept rather than I cannot accept your offer it is too high. Will you accept Mailbox rule if the acceptance is mailed to the offeror, it becomes effective upon dispatch assuming that acceptance was properly mailed with postage and correct address Parties can choose to allocate risk RS64 acceptance by telephone or other medium of substantially instantaneous two way communication is treated the same as if the parties are physically present Advertisements normally an invitation and not an offer, but it can be seen as a unilateral contract if it makes a promise such as X units available, first come first serve. Bilateral Unilateral Contracts Bilateral is most common and it involves mutual promises for future performance Unilateral contracts may occur when the act of assent merges with the performance, at which point of acceptance only one party has an outstanding obligation to perform. When offer does not clearly prescribe promise or performance (i.e. I offer to sell Blackace for 2M. If you wish to buy it you must pay 2M by Friday in my office) he may be indifferent in which case the offeree can accept by either mode. Accept with a promise for future performance in eager to close deal (bilateral) or accept and perform at the same time (unilateral). RS62 and RS45 give legal effect to the commencement of performance, so that if acceptance is by performance, the offeror cannot terminate the...
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