Term
| Requirements for Contract |
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Definition
- Agreement
- Consideration
- Capacity
- Legality
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Term
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Definition
| a voluntary offer and acceptance regarding certain terms |
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Term
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Definition
| the exchange of something of legal value. This is often goods or money but it may simply be a promise not to take certain action |
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Term
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Definition
| the ability to make a binding contract. Minors, for example are limited in this capacity. |
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Term
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Definition
| the lawfulness of the contract’s subject matter. For some limited types of contracts, there is also a form requirement, such that the contract must be in writing to be effective. |
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Term
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Definition
- Unilateral or Bilateral
- Written or Oral
- Express or Implied
- Void, Voidable or Unenforceable
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Term
| Unilateral or Bilateral Contract |
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Definition
| Most contracts involve a promise in exchange for a promise. These are bilateral contracts and both sides are bound to carry through on their promise. Some contracts are unilateral, which involve a promise for an act. Here, the promisor is not bound until the act is performed. |
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Term
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Definition
| Although most contracts need not be in writing, putting the deal in writing is generally advisable. When there is a writing, it overrides any oral side deals. The law has some presumption that large deals will be put into writing. |
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Term
| Express or Implied Contract |
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Definition
| Most contracts are expressed in words, written or oral. A contract may be implied, though, without any words whatsoever, if the circumstances and parties’ actions indicate that they contemplated a bargain. |
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Term
| Void, Voidable or Unenforceable Contract |
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Definition
| A void contract is one without any legal effect, such as an illegal contract. A voidable contract is temporarily effective but can be voided by one side to the contract, such as a minor. An unenforceable contract is one that cannot be enforced in court for a reason such as the statute of limitations. |
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Term
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Definition
- Quasi-Contract
- Promissory Estoppel
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Term
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Definition
| This is a contract imposed by law, in the absence of voluntary agreement. They are disfavored but may be imposed when fairness requires and particularly when the parties presumably would have made a contract but were prevented by circumstances (e.g., an emergency rescue). |
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Term
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Definition
| Ordinarily the law does not enforce gifts or promises without consideration. An exception is made in promissory estoppel when a party’s unilateral promise induces justifiable reliance by the other party. |
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Term
| Uniform Commercial Code (UCC) |
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Definition
| Contract law was built up over centuries of common law. In the United States, the Uniform Commercial Code takes these common law doctrines and incorporates them into state statutes. All states except Louisiana have passed the bulk of the U.C.C. The Uniform Commercial Code is limited to transactions in goods and does not extend to service contracts. |
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Term
| Requirements of a Contract Offer |
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Definition
- Serious Intention to be Bound
- Definiteness
- Communication
- Not terminated
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Term
| Serious Intention to be Bound |
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Definition
| To constitute an offer, a statement must sound like such an offer to the reasonable listener. Statements made in jest or out of anger are not offers that can be accepted. Nor are advertisements or preliminary negotiations legal offers. |
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Term
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Definition
| To constitute an offer, the statement must have reasonably definite terms. Thus, it should generally specify the consideration. Vague promises like a “reasonable share of the profits” are not offers. |
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Term
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Definition
| An offer must be communicated to the offeree to be effective |
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Term
| Termination of Contract Prior to Acceptance |
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Definition
- Revocation
- Rejection or Counteroffer
- Operation of Law
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Term
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Definition
| The person who makes an offer may revoke that offer any time prior to acceptance. The exceptions to this rule are option contracts and certain offers by merchants who promise to hold them open. |
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Term
| Rejection or Counteroffer |
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Definition
| If the offeree rejects the offer or makes a formal counteroffer, the original offer terminates. |
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Term
| Termination Due to Operation of Law |
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Definition
| Offers are terminated by law after a certain lapse of time (depending on the circumstances of the offer), the destruction of the subject matter of the offer, and other factors. |
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Term
| Requirements of Acceptance |
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Definition
- Method of Acceptance
- Serious Intention to Accept
- Communication
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Term
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Definition
| Any offer can be accepted by any method reasonable in light of the offer. |
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Term
| Serious Intention to Accept |
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Definition
| Like the offer the acceptance must be clear and unambiguous. |
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Term
| Communication (acceptance) |
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Definition
| An offer is not effective until it is communicated to the offeror. |
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Term
| Acceptance Varying from the Offer |
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Definition
- Mirror Image Rule
- U.C.C. § 2-207
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Term
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Definition
| Under the traditional common law, the offeror could only accept the offer exactly as it was presented. One could not both modify and accept another’s offer. |
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Term
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Definition
| Under the U.C.C., an acceptance may slightly modify the offer and still produce a contract. Contemporary business takes place with purchase orders and confirmations, which often contain different terms. If the parties fundamentally intend to contract and do not intend to insist upon their own terms, then a contract exists, even if the offer and acceptance are not identical. If the acceptance contains additional terms, they become part of the contract, unless the offeror promptly rejects them or they materially transform the offer. If the acceptance terms conflict with the offer, courts use the general U.C.C. rules as a default position. |
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Term
| When Acceptance Takes Effect |
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Definition
Although acceptance requires communication, it is effective before it reaches the offeror. An acceptance is effective and creates a binding contract as soon as it is dispatched by reasonable means.
(Mailbox Rule) |
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