Term
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Definition
| Parties agree on the terms of the contract and manifest to each other their mutual assent to the same bargain. Consists of and offer and an acceptance. |
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Term
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Definition
| Promise or commitment to do or refrain from doing some specified thing in the future. |
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Term
| 3 Elements of an effective offer |
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Definition
- Offeror must have a serious intention to become bound by the offer
- Terms must be certain or definite. Parties and courts can understand contract terms.
- Offer must be communicated to the offeree
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Term
| How Intention in agreement is judged by the court |
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Definition
| Judge by objective theory of contracts rather than subjective intentions. Party's word and conduct are held to mean whatever a reasonable person in their offeree's position would think they meant. |
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Term
| 6 things that are not a valid offer |
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Definition
- Expressions of Opinion
- Preliminary Negotiations
- Statements of Future Intent
- Agreements to Agree (Unless parties intend to be bound by the contract terms)
- Advertisements
- Auctions - Offeror is the bidder and auctioneer is the offeree. His asking for bids is not an offer.
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Term
| Definite Terms that must be included in a contract |
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Definition
- Identification of the parties
- Object or subject and quantity matter of contract including work to perform, goods, services, etc.
- Consideration to be paid
- Time of payment, delivery, or performance.
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Term
| 3 Ways an offer can be terminated by action of parties. |
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Definition
- Revocation
- Rejection
- Counteroffer
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Term
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Definition
| Offeror withdraws the offer. Cannot be done if an offer is irrevocable. Must be communicated before the offeree accepts the offer. Can be done by express repudiation of the offer (revocation sent in writing like a letter). |
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Term
| 4 Kinds of irrevocable offers |
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Definition
- Option Contract
- Real Estate Option Contract
- Detrimental Reliance and Promissory Estoppel
- Detrimental Reliance and Partial performance
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Term
| 6 Elements that make offers irrevocable |
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Definition
- Option Contract
- Real Estate Option Contract
- Detrimental Reliance and Promissory Estoppel
- Detrimental Reliance and Partial Performance
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Term
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Definition
| The promissor is barred from revoking the offer. |
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Term
| Detrimental Reliance and partial performance |
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Definition
| After accepting an offer, the offeree has a reasonable amount of time to perform. The offer cannot be revoked if the offeree has already completed a substantial amount of performance. |
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Term
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Definition
| When an offeror promises to hold an offer open for a specified period of time in return for a payment given by the offeree. |
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Term
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Definition
| to bar, impeded, or preclude someone from doing something. Bars a promisor (offeror) from revoking an offer. |
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Term
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Definition
- When offeree rejects, the offer is terminated.
- If offeree later tries to accept, it is considered a new offer and the original offeror now becomes the offeree with the power to accept.
- Rejection of offers are only effective when actually received by the offeror or agent.
- If offeree asks about details of the offer, rejection of the offer can't be assumed.
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Term
| Counteroffer by the offeree |
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Definition
- The original offer is rejected and a new offer is created with different terms.
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Term
| Mirror Image rule of counteroffers |
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Definition
| Any changes in or additions to the original offer automatically terminates that offer and substitutes the counteroffer. If the original offeror accepts the counteroffer, a contract is made. |
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Term
| 4 Elements of termination of an offer by operation of law |
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Definition
- Lapse of time
- Destruction of the specific subject matter of the offer
- Death or incompetence of the offeror or the offeree.
- Supervening illegality of the proposed contract.
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Term
| Termination of an offer due to supervening illegality of the proposed contract |
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Definition
| If there is some statute or court decision that makes an offer illegal, the offer is automatically terminated. If some law is created after the offer has been accepted, a valid contract is formed, but it may not be enforceable. |
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Term
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Definition
- Voluntary act by the offeree that shows assent to the terms of an offer. May consist of words or conduct.
- Acceptance must be unequivocal and communicated.
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Term
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Definition
| the offeree accepts the offer as the terms have been established, without introducing any knew terms. If the offeree accepts based on some aspect of the offer changing or some new term in the offer, it is considered a counteroffer. |
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Term
| Silence as acceptance to an offer |
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Definition
- Silence cannot ordinarily constitute acceptance, even if the offeror states that "by silence, you accept the offer."
- If offeree watches someone perform some duty knowing they expect to be paid for it, silence can mean acceptance. They failed to reject.
- If offeree has previously dealt with offeror and typically communicates things, silence can mean acceptance.
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Term
| Communication of acceptance |
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Definition
- Communication required in a bilateral contract since it is a promise for a promise and the contract is created when the promise is made.
- Communication not required in unilateral contracts since they call for performance. Exception is if the offeror requests notice of acceptance or the law specifically requires it.
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Term
| Mode of timeliness of Acceptance |
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Definition
- Acceptance in bilateral contracts is timely if it is made before the offer is terminated.
- Mailbox rule
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Term
| Mailbox rule of acceptance and offer |
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Definition
- An acceptance sent through mail becomes effective on dispatch (when sent and placed in the control of the postal service, even if it is never received).
- An offer is effective when actually received by the offeree.
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Term
| 3 Exceptions to mailbox rule |
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Definition
- If the acceptance is not properly dispatched, it will not be effective until received by the offeror.
- If offeror specifically conditioned the offer on receipt of acceptance, it will not be effective until received by the offeror.
- If acceptance is sent after rejection, whichever arrives to offeror first takes effect.
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