Term
| What are the elements of a contract? |
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Definition
| (1) Manifestation of mutual assent by two or more persons each with at least partial legal capacity; (2) consideration; and (3) reasonably-certain terms. |
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Term
| When does a person lack capacity to enter into a contract? |
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Definition
| If his property is under guardianship by reason of an adjudication of mental illness, even if the other party is unaware of the guardianship and even if the mentally-ill person entered into the contract during a lucid interval. |
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Term
| A manifestation of mutual assent ordinarily takes what form? |
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Definition
| An offer and an acceptance. |
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Term
| Must a party manifest an intention that an agreement be legally binding for it to be a contract? |
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Definition
| No. The presumption is that the parties intend it to be legally binding. |
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Term
| What is the result if the parties manifest an intention that an agreement is not legally binding? |
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Definition
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Term
| What are two common situations in which the parties impliedly manifest an intention that an agreement is not legally binding? |
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Definition
| Social engagements and domestic arrangements. |
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Term
| What are the elements of an offer? |
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Definition
| (1) The offeror's manifestation of willingness to enter into an agreement; (2) the manifestation is communicated or delivered to the offeree; and (3) the offeree would be justified in understanding her assent is invited and will conclude the agreement without a further manifestation from the offeror. |
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Term
| What is the rule regarding advertisements as offers? |
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Definition
| An offer is not ordinarily considered an offer, and is instead ordinarily considered a solicitation for an offer. |
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Term
| What is the rule regarding whether a seller makes an offer at an auction? |
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Definition
| Unless the seller manifests an intention that the auction is without reserve, the auction is with reserve and the buyer is the offeror and the seller is the offeree. |
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Term
| What is the rule regarding preliminary negotiations vs. an offer? |
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Definition
| A communication is not an offer, but simply preliminary negotiations, if a reasonable person in the position of the recipient would believe the person making the communication does not intend to conclude a contract until he or she has made a further manifestation of assent. |
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Term
| What is the rule that applies when the parties manifest an intention to reduce their agreement to a written document? |
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Definition
| When negotiations show that the parties discussed or contemplated that they would express their agreement in a written document, but they fail to do so, there is no contract if either party manifested an intention that the agreement would not be binding unless and until reduced to a written document, but there is a contract if the parties manifested an intention that the written document would simply memorialize the deal. |
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Term
| Does a minor have the capacity to contract? |
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Definition
| Yes, limited or partial capacity. |
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Term
| Does a person with a mental illness, but whose property is not under guardianship by reason of an adjudication of mental illness, have the capacity to contract? |
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Definition
| Yes, but such person has limited or partial capacity if the person cannot understand the nature of the transaction. |
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Term
| Does an intoxicated person have the capacity to contract? |
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Definition
| Yes, but such a person has only partial or limited capacity if the person does not understand the nature of the transaction. |
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Term
| A person who makes an offer is called what? |
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Definition
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Term
| A person to whom an offer is made is called what? |
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Definition
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Term
| What is the name of the theory that applies to contract formation? |
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Definition
| Objective theory of contract |
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Term
| When does the objective theory of contract apply? |
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Definition
| When there is a misunderstanding. |
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Term
| The objective theory of contract applies what standard? |
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Definition
| Reasonable person standard. |
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Term
| Why should you avoid using the phrase "meeting of the minds"? |
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Definition
| Suggests a subjective theory of contract formation. |
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Term
| What factors are relevant to determining whether an advertisement is an offer? |
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Definition
| (1) Whether it includes language of commitment; (2) whether it is clear, definite, and explicit; (3) whether it leave nothing open for negotiation; (4) whether it specifies the method of acceptance; and (5) whether it includes a limitation of quantity available. |
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Term
| What factors are applied to determine whether a price quotation is an offer? |
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Definition
| (1) Whether the price quotation was in response to a consumer's solicitation seeking a quote; (2) the quotation's detail; and (3) the number of persons to whom it is made. |
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Term
| Is a purchase order ordinarily an offer? |
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Definition
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Term
| What factors are considered in deciding whether the parties manifested an intention that the deal would not be final until reduced to a more formal written document? |
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Definition
| (1) The number of terms included; (2) whether the agreement is a type usually reduced to writing; (3) whether a writing is needed for the agreement's full expression; (4) whether the agreement has few or many details; (5) the amount of money involved; (6) whether the transaction is typical or unusual; (7) whether a standard form contract is typically used in the industry for the type of transaction; and (8) whether either party took any actions in preparation for performance. |
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Term
| If the parties only engaged in preliminary negotiations, does that mean no legal claim can be asserted? |
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Definition
| No. There might be a claim for promissory estoppel or for unjust enrichment. |
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Term
| If an apparent offer states that it is subject to further approval by the apparent offeror, is it an offer? |
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Definition
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