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MGMT 212
Contract law: Agreement (ch 11)
19
Management
Undergraduate 2
06/16/2009

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Term
Mutual assent
Definition
ordinarily, the mutual assent of the parties to an agreement is evidenced by an offer and acceptance.
Term
Offer
Definition
a promise to do or not do something contingent upon acceptance
Term
3 requirements to an offer
Definition
1.) offeror must have serious intent. 2.) terms of offer must be reasonably definite and certain. 3.) offer must be communicated so offeree receives offer
Term
intention
Definition
offeror must manifest his objective, serious intention to be bound by the terms of the offer
Term
Lucy v. Zehmer
Definition
Lucy (D) wanted to purchase land from Zehmer (P). They were drinking, wrote up a contract and signed it. Zehmer later said he was too drunk. From a reasonable standard, he seemed to be serious. He was forced to sell the land.
Term
4 things that aren't offers
Definition
1.) Expressions of opinion. 2.) statements of intention to make offer in the future. 3.) preliminary negotiations, requests to negotiate, and invitations for bids. 4.) Ads, catalogues, circulars, and price lists
Term
Definiteness of terms, 4 terms required
Definition
An offer must have reasonable definite terms so that a court can determine if a breach has occurred. 1.) identify parties. 2.) identify subject matter. 3.) Consideration. 4.) Time for payment/performance (not as important to courts). // Courts are willing to supply missing reasonable terms when parties clearly manifested their intent to form a contract. Courts will not supply a "reasonable" term in place of a vague term.
Term
Communication
Definition
Offeror must have the intention of making the terms known to the offeree and those terms must be RECEIVED by the offeree.
Term
Revocation
Definition
An offer may be revoked by the offeror at any time BEFORE acceptance expressly or by acts that are inconsistent with the existence of the offer and are KNOWN to the offeree (sell item to someone else). Revocation is effective when received. A public offer is effectively terminated when the revocation is communicated in the same manner as that used in order to make the offer.
Term
Irrevocable offers
Definition
Option contracts, detrimental reliance, unilateral contracts (once performance has begun)
Term
option contracts
Definition
a separate contract that exists when an offeror has promised to hold the offer open and the offeree has given consideration for this promise of the offeror. (Offeree pays $ to have a few days to think about deal. Offeror cannot sell item or revoke offer during these days). Death or incompetency of the offeror or the offeree does not terminate the offer unless the offeror's or offeree's personal performance is essential to the fulfillment of the contract.
Term
Rejection of offer by offeree
Definition
Offeree demonstrates his or her intention not to accept offer (words or conduct). Rejection is effective when received. An inquiry made by an offeree is NOT a rejection (how low will you go, is that your best offer).
Term
Counteroffer by offeree
Definition
A counteroffer is a rejection of an offer and the simultaneous making of a new offer; the counteroffer may be accepted by the orginal offeror. Counteroffer terminates original offer. Mirror image rule: if acceptance isn't a mirror image of the offer, then it's a counteroffer.
Term
Termination by operation of law (4 ways)
Definition
1.) Lapse of time (may be stated or reasonable amount of time). 2.) Destruction of the subject matter of offer. 3.) Death or incompetency of the offeror or offeree (except in option contract). 4.) Supervening illegality of the proposed contract as a result of legislation or judicial decision.
Term
check out pg 216 in handbook
Definition
yeah
Term
acceptance
Definition
The offeree accepts the offer when he offeree unequivocally manifests his willingness and intention to assent to the terms of the offer.
Term
Silence as acceptance
Definition
Generally silence isn't acceptance. Exceptions: the offeree accepts the benefit of the offered goods when the offeree had an opportunity to reject the offered goods and know he should have paid. OR There was a similar prior course of dealings.
Term
communication of acceptance (unilateral v. bilateral), mailbox rule
Definition
Unilateral: acceptance effective when performance is completed. Bilateral: acceptance is effective when the offeree gives the requisite promise. An acceptance is effective when SENT (this means as soon as it's in the mailbox). // Acceptance must be sent as agreed upon in contract. If not, it isn't effective until RECEIVED by offeror.
Term
pg 217 in handbook
Definition
do it!
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