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1
Q

Mutual Assent

A

Ordinarily, the mutual assent of the parties to an agreement is evidenced by an offer and an acceptance.

2
Q

Objective Assent

A

only present, apparent, objective intent of the parties, which the parties have manifested by such words or conduct as would indicate to a reasonable person an intention to be bound by the same terms, is recognized in law.

3
Q

Requirements of the Offer

A
  1. Offeror must have serious intent to make an offer
  2. There must be reasonably certain and definite terms
  3. The offer must be communicated
4
Q

Intention

A

The offeror must manifest his or her objective, serious intention to be bound by the terms of the offer. The court cares about what is visual, not what is in your head.

5
Q

Lucy v. Zehmer

A

Involves 2 issues. Only one of our landmark cases with 2 issues. Virginia 1950s. Mr. and Mrs. Zehmer own a farm, the Ferguson Farm. The farm has been in the family for 100s of years. Everyone in town knows that Mr. Zehmer has no intent to sell the farm. Mr. and Mrs. Lucy are at dinner with Mr. and Mrs. Zehmer. Napkin – terms of a deal are written. Two drafts of this, one on a napkin, one of a receipt. The amount, lot and plot number, title insurance, are all on the napkin contract. Signing a contract is the first step of a real estate contract. Mr. Zehmer refuses to comply with the title company. Does Mr. Zehmer show serious intent? He’s arguing that he was kidding, but his actions say otherwise.
- Intent to sell: legal terms (very detailed), rewritten to include his wife
- Lucy’s win the case, Zehmer’s lose the family farm

6
Q

Situations in Which Intent May be Lacking

A
  1. Expressions of opinion
  2. Statements of intention to make an offer in the future.
  3. Preliminary negotiations, requests to negotiate, and invitations for bids.
  4. Advertisements, catalogues, circulars, and price lists.
  5. Live and Online Auctions
  6. Agreements to agree in the future – modern view is they can be binding agreements
  7. Preliminary agreements – sometimes they are binding and sometimes they are not.
7
Q

Expressions of opinion

A

“this looks like a great car and an excellent price”

8
Q

Statements of intention to make an offer in the future.

A

“I plan to sell my car for $15,000”

9
Q

Preliminary negotiations, requests to negotiate, and invitations for bids.

A

“would you be interested in buying my car?”

“I am interested in building a pool, and so I talk to 3 pool builders. Am I making offers to each offer?”

The homeowner is actually the offeree, the people making the bids are the offeror.

10
Q

Live and Online Auctions

A

The auctioneer is the offeree (agent of the sellor).

11
Q

Definiteness of Terms.

A

An offer must have reasonably definite terms so that a court can determine if a breach has occurred.

12
Q

In general, the following terms are required:

A
  1. Identification of the parties
  2. Identify the subject matter
  3. Consideration
  4. Statement about the time for performance (some courts want to see this – but not absolutely essential for every offer.)
    FIRST 3 are absolutely essential!
13
Q

Courts are willing to supply missing reasonable terms when…

A

the parties have clearly manifested their intent to form a contract.

14
Q

When the parties have tried to use a term, but the meaning is vague, courts will…

A

not supply a “reasonable’ term in its place.

15
Q

Communication

A
  1. The offeror must have the intention of making the terms known to the offeree and those terms must be received by the offeree.
  2. The offeree must have knowledge of the terms of the offer.
  3. An offer may be made to a specific offeree to whom it is communicated. But it can also be made to the public.
16
Q

Golden doodle puppy, Ginger. She has run away. Lost puppy reward posters ($500 reward, picture, address on the poster). I find her, I’ve never seen a reward poster, but I see the address on the collar, I bring her home. I never saw the poster, it was not communicated, Legally I am not entitled to the reward?

A

No. Ethically, maybe.

17
Q

Revocation of the offer by the offeror

A

In general, an offer may be revoked by the offeror at any time before acceptance:
1) expressly; or (“I don’t want to sell my watch anymore”)
2) by acts that are inconsistent with the existence of the offer and are known to the offeree. (implied revocation by the offeror) – must be communicated

18
Q

Golden doodle has puppies. Hailey is selling the puppies, I go hold one, and I tell Hailey I need to think about it. My roommate walks in with Hailey’s last puppy “look, I just bought Hailey’s last puppy.” Was this communicated?

A

It is done in such a way that I am now aware of it – Hailey would know that I would see it.

19
Q

A revocation is effective when…

A

RECEIVED by the offeree
“R” and “R”

20
Q

A public offer is effectively _________ when the revocation is communicated in the same manner as that used in order to make the offer.

A

terminated

21
Q

Irrevocable offers

A

Once it’s made, the offeror cannot revoke.
1. Option Contracts
2. Detrimental Reliance
3. Unilateral contracts once performance has been substantially undertaken

22
Q

Option Contracts

A

An option contract is 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.

23
Q

What is the most common irrevocable offer?

A

Option Contracts (Option clause within a contract)

24
Q

Example of an option clause

A

buying a house – pay an option fee and you are allowed to walk away from the contract within _____ days (usually 3-5 days) ONLY the buyer gets the option.

25
Q

The offer is irrevocable for the period of time that is…

A

stated, or if no period is stated, for a reasonable period of time.

26
Q

What is the option contract exception to the death or incompetency fulfillment of the contract rule?

A

death or incompetency of either party does not terminate the offer and the deceased party’s estate is responsible for fulfilling the obligations under the option contract.
Rational: the option contract is irrevocable.

27
Q

Personal Service Option Contract Exception

A

Death or incompetency of the offeror will terminate the offer because the offeror’s personal performance is essential to the fulfillment of the contract.

28
Q

Detrimental reliance

A

because of the doctrine of promissory estoppel, an offeror may be estopped from revoking an offer when an offeree detrimentally changed his or her position in justifiable reliance on the offer.

29
Q

Estoppel

A

offeror is prevented from saying “I didn’t say that”

30
Q

Hailey is a commercial landlord, 5 year lease, we are in the fourth year. I have decided that rent is way too expensive, “I’m just giving you a heads up, I’m leaving because your rent is too expensive.” Hailey, “Oh, I don’t want to lose you – you’re a good tenant. I’ll lower the rent.” Hailey didn’t lower the rent, and in fact raised the rent.

A

I didn’t go out and find another lease – court makes Hailey do what she said she would.
“equitable solution to an unfair situation.”

31
Q

Offers to enter into unilateral contracts once…

A

performance has been substantially undertaken.

32
Q

Rejection of the offer by the offeree.

A
  1. Offeree demonstrates his or her intention not to accept offer.
  2. Rejection is effective when received.
  3. An inquiry made by an offeree is distinguishable from a rejection and does not terminate offer.
33
Q

Offer: said by Offeror
Would you like to buy my Toyota Sequoia for $15,000?

A

Offeree responds:
No, that’s too much money for a 2015 Toyota Sequoia. (rejection)
Is that your best offer? (inquiry)
I’ll buy your car if you throw in 4 brand new tires (counter offer) – rejection and then new offer

34
Q

Counteroffer

A

A counteroffer is a rejection of an offer and the simultaneous making of a new offer; the counteroffer may be accepted by the original offeror.
A counteroffer terminates the original offer.

35
Q

Mirror Image Rule

A

Offeree’s acceptance must exactly match the offeror’s offer. If you add anything else – it is a counter offer.
A communication from the offeree which contains a material change in addition to the terms of the original offer is a counteroffer, which terminates the original offer.

36
Q

Termination by Operation of Law

A
  1. Lapse of Time
  2. Destrecution of the subject matter of the offer
  3. Death or incompetency of the offeror or offeree
  4. Supervening illegality of the proposed contract as a result of legislation or judicial decision
37
Q

Lapse of Time

A

If the duration of an offer is stated in the offer, the offer terminates after expiration of the stated period of time.
If the duration of an offer is not stated in the offer, the offer lapses after a reasonable period of time.

38
Q

Destruction of the subject matter of the offer

A

Subject of the contract is destroyed. Ex: selling a dog, the dog dies, there is nothing left to sell. Crops destroyed, house burned down… if the subject is destroyed, the offer dies too.

39
Q

Example of supervening illegality of the proposed contract as a result of legislation or judicial decision.

A

Usury laws – present in every state. Usury laws set a maximum rate of interest for loans of money. If a loan is proposed with a rate that is then changed by law to have to be lower, the original proposed loan has to die – it would be illegal.

40
Q

Accceptance

A

The offeree accepts the offer when the offeree unequivocally manifests his or her willingness and intention to assent to the terms of the offer.

41
Q

Acceptance must be…

A

unequivocal

42
Q

Ordinarily, the offeree must exhibit his or her agreement to be bound with words or other overt conduct. What are the exceptions?

A

The offeree accepts the benefit of the offered services or goods when the offeree had an opportunity to reject the offered services or goods and know that such services or goods were offered with the expectation of compensation; or
(implied contract)
There was a similar prior course of dealings.
Contracts between these parties before..

43
Q

Communication of Acceptance - Unilateral Contract

A

If a unilateral contract is contemplated, acceptance is effected when the performance is completed; notification of the acceptance is not necessary. Offeror phrased the contract as unilateral, the offeree has to perform the action.

44
Q

Communication of Acceptance - Bilateral Contract

A

If a bilateral contract is contemplated, acceptance is effective when the offeree gives the requisite promise.

45
Q

Express means of acceptance

A

Sometimes offers tell us how to accept

46
Q

Implied means of acceptance

A

1) Offeree can accept by any reasonable means.
2) Lack of choice usually implies Offeree can use the same or a faster means. Snail mail offer – offeree could respond with another letter, or something else professionally acceptable (email, phone call, fax, text)

47
Q

Acceptance will not be effective until the acceptance is received by the offeror, IF…

A

the acceptance is sent in a manner that is not expressly or impliedly authorized;
(when you don’t follow instructions)
Acceptance was improperly sent; OR
Offeror included a condition in the offer that acceptance will not be effective until the acceptance is received by the offeror.

48
Q

If an offeree sends a rejection and later sends an acceptance…

A

the first communication received by the offeror will be effective.

49
Q

A contract is created at…

A

the moment the acceptance is effective

50
Q

Mary makes a valid offer in writing on 4/15 to sell Black acre to John. The offer says, “I, Mary, will sell you, John, Blackacre for $100,000, if you accept by 5/1.” John receives the offer on 4/18. Upon reading the offer John immediately decides to accept and writes a letter of
A. Yes, because the acceptance was sent before the revocation was received
B. No, because Mary validly revoked the offer first
C. Yes, because it is irrelevant that Mary miscalculated the worth of the property
D. Yes, because acceptance is valid when received and a revocation is valid when sent
E. None of the Above

A

A is the correct answer

D is wrong because the rules are backwards
B is wrong – not what happened
C is wrong – Mary should have done her homework before she made an offer

51
Q

Online Contract Formation

A
  1. Online offers
  2. Online acceptances
52
Q

Online acceptances

A
  1. Click-on agreements
  2. Browse-wrap terms
53
Q

Click-on agreements

A

Initial action is clicking on a box that something like “I agree” or “I accept”, the terms were before the box, they are binding.

54
Q

Browse-wrap terms

A

Downloading a software, then clicking “I accept” you took the action before the terms were presented to you. Not always enforceable.

55
Q

E-SIGN Act (Electronic Signatures in Global and National Commerce Act of 2000).

A

a. No contract, record, or signature may be denied legal effect solely because it is in electronic form.
b. Parties must have agreed to use electronic signatures.
c. Contract must be in a form that can be retained and reproduced.

56
Q

Exceptions to applicability of E-SIGN Act:

(Transactions that cannot be formed electronically)

A

1) Court papers
2) Divorce decrees
3) Evictions
4) Foreclosures
5) Health insurance terminations
6) Prenuptial agreements
7) Wills

57
Q

Wills

A

In Texas to have a valid will, you have to have a “ceremony” that you cannot prove with an electronic signature. Testator and 2 witnesses.

58
Q

E-SIGN Act says if a state has adopted UETA without modification…

A

then that state law stands. If state has modified UETA, then E-SIGN prevails if state law is inconsistent with it.

59
Q

The Uniform Electronic Transactions Act (UETA) of 1999

A

a.E-signature – “an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.”
b.Record – “information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.”
c. Applies only to electronic records and signatures “relating to a transaction.”

60
Q

While gambling at Prairie Meadows Casino, Sam Blackmon became angry and smashed a slot machine. He was banned from the premises. He tried to enter the casino on a later date and was immediately removed. Despite the ban, he later managed to get in the casino and gambled at the casino and won $9,387. When he tried to collect his winnings, the casino refused to pay. Blackmon sued for breach of contract. He claimed he accepted its offer to gamble.

Did the casino and Blackmon have a contract?

A

Casino revoked their offer to him when they banned him from the premises.