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Contracts
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Contracts
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BarCharts, Inc was founded on our law guides created by the owner. They were designed to understand the significant details within the larger scheme of the law, as a daily refresher, and to review before the Bar Exam. Twenty five years later we keep those guides up to date for students, paralegals, and practicing lawyers to have the most handy legal reference to the most important points of the law possible in 6 laminated pages. Suggested uses:
o Check list in contracting situations
o To understand proportion and relevance
o Quick and constant refreshers before classes and exams
o As the last review before taking the Bar Exam
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Informations
Sujet
LawSous-sujet
Contract LawThe Agreement Process
OFFER INTENT TO CONTRACT INDEFINITENESS OF THE CONTRACT OFFERS DISTINGUISHED FROM NON-OFFERS DURATION OF OFFER TERMINATION OF OFFER ACCEPTANCE COMMON LAW MAILBOX RULE
- Offeror: Person who makes the offer and now has the power to control the offer
- Offeree: Person to whom the offer is made and whom now has the power of acceptance
- Offers must:
- Be communicated
- Indicate a desire to enter into a contract
- Be directed at a person or group
- Invite acceptance
- Create understanding that if accepted, a contract now arises
- Expression of present intent to enter into a contract
- Intent to be legally bound to the contract
- Must be an objectively reasonable manifestation of intent to contract
- Use a reasonable standard unless one party has specific knowledge to which they can be held
- Restatement 2nd Contracts §24: âManifestation 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 itâ
- Actual knowledge of Offeree
- Communication of offer by Offeror to Offeree
- Creates power of acceptance in Offeree
- Even though parties have reached an agreement so that there is mutual assent, the agreement may be void if the content of the agreement is unduly uncertain
- Offer must be so definite as to its material terms, or require such definite terms in the acceptance, that the promises and the performances to be rendered are reasonably certain
- Material terms may include subject matter, price, payment terms, quantity, duration, and work to be done
- Under UCC, the only term required to be definite is quantity
- Opinions
- Expressions of opinion and words of reassurance are not promises and are therefore not offers
- Reasonable person test used to distinguish opinions from offers, using circumstances and language expressed
- Advertising
- Generally, an invitation to receive offers from the public where the advertiser has an option to accept, negotiate, or reject the publicâs offer to buy
- Obvious jokes in communication are not offers
- However, if language is specific enough as to price and quantity, then it could be an offer
- Inquiries and quotes
- Generally considered as invitations for an offer
- To determine if it is an inquiry or offer, examine whether there is language of commitment and whether the terms, especially quantity, are sufficiently definite
- Auctions
- Default: The item up for auction is treated as an invitation for offers to buy, which may be rejected by the seller. Thus, bidders at an auction are treated as offerors
- Exception: If the auction is âwithout reserve,â meaning the seller is making an offer to sell for any price, which can then be accepted by the buyer when presented for auction. Thus, bidders here are treated as Offerees
- Stated in offer
- Generally, the time for acceptance is measured from the date the offer is received
- Firm offer (UCC only)
- Merchant offers to keep the offer open with no consideration to support for the period of time
- If no time limit is stated, the firm offer only lasts for a reasonable time (code states a maximum of three months)
- Option contracts
- To make an offer irrevocable, the Offeror can accept consideration in exchange for a promise to keep the offer open for a specific period of time
- Under UCC, if the consideration is accepted, the firm offer rule does not apply
- By Offeror (master of the offer)
- Revocation: Manifestation of intent not to enter into a contract
- Offer may be revoked any time prior to acceptance by Offeree (unless an option contract is created)
- Effective when received
- In possession of person to whom it is addressed
- In possession of person authorized to receive the document
- Deposited in an authorized location
- Expressed (communicated)
- Conduct
- Reasonable to understand that the offer is no longer open
- Subject to reasonable inquiry
- Offer can stipulate that the power of acceptance will terminate on the happening of a certain eventâeven if Offeree is not informed that the event has occurred
- Unilateral contract
- Generally, the offer becomes irrevocable once Offeree begins to perform
- Mere preparation by Offeree is not enough
- Generally, the offer becomes irrevocable once Offeree begins to perform
- Revocation: Manifestation of intent not to enter into a contract
- By Offeree
- Rejection terminates offer
- Counteroffer terminates offer
- Creates a new offer
- Offeree becomes new Offeror
- Exceptions to rejection/counteroffer
- Counter-inquiry: Asking Offeror to take less preserves the offer
- Comment on the terms (e.g., stating that the price is too high) preserves the offer
- Request for modification that does not rise to level of a counteroffer preserves the offer
- By operation of law
- Death or insanity
- Death must occur between making the offer and acceptance
- Destruction of subject matter
- Supervening law so as to make the contract illegal
- Death or insanity
- Acceptance must mirror terms (mirror image rule)
- Addition of new terms or a change to the terms equals a counteroffer
- A bilateral contract seeks acceptance by a return promise
- A unilateral contract seeks acceptance by a return performance
- Contract arises if Offeree notifies Offeror, Offeror learns of performance within reasonable time, or offer indicates that notice is not necessary
- Notice of performance must be communicated if required
- Acceptance by silence or conduct
- Silence is not acceptance
- An express contract is formed by words
- Exception: Silence may be acceptance if:
- An implied-in-fact contract is formed by conduct, but not put into promissory words clearly. A fact finder must examine and interpret the partiesâ conduct to help define the unspoken agreement
- Trade practice: Buyer has a history of retention of goods on prior shipments from Seller
- Offeree takes benefit. Under the presumption that compensation is expected, the issue remains whether a reasonable person would conclude that services are rendered gratuitously
- Acceptance is valid when ...