Chapter 9 Agreements in Traditional and E-Contracts

Question 1

What is an agreement?

Answer 1

An essential element for contract formation is an agreement.

Question 2

What is an offer?

Answer 2

An offer is a promise or commitment to perform or refrain from performing some specified act in the future.

Question 3

What is an offeree?

Answer 3

The party to whom the offer is made

Question 4

What are the three elements necessary for an offer to be effective?

Answer 4

1) There must be a serious, objective intention by the offeror.
2) The terms of the offer must be reasonably certain, or definite, so that the parties and the court can ascertain the terms of the contract.
3) The offer must be communicated to the offeree.

Question 5

How is intent determined?

Answer 5

It is determined by what a reasonable person in the offeree’s position would conclude the offeror’s words and actions meant.

Question 6

Is an opinion an offer?

Answer 6

No. An expression of opinion is not an offer.

Question 7

Is a statement of an intention an offer?

Answer 7

No. A statement of an intention to do something in the future is not an offer.

Question 8

Is a request or invitation an offer?

Answer 8

No. A request or invitation to negotiate is not an offer.

Question 9

Are advertisements, catalogues, price lists, and circular letters offers?

Answer 9

No. Advertisements, catalogues, price lists, and circular letters are treated as invitations to negotiate, not as offers to form a contract.

Question 10

Are agreements to agree binding contracts?

Answer 10

The modern view is that agreements to agree may be enforceable agreements (contracts) if it is clear that the parties intended to be bound by the agreements.

Question 11

Are preliminary agreements binding contracts?

Answer 11

Yes. Preliminary agreements constitutes a binding contract if the parties have agreed on all essential terms and no disputed issues remain to be resolved.

Question 12

What is definiteness?

Answer 12

An offer must have reasonably definite terms so that a court can determine if a breach has occurred and give an appropriate remedy.

Question 13

What must be included in a contract in regards to definiteness?

Answer 13

1) The identity of the parties.
2) The identification of the object or subject matter of the contract.
3) The consideration to be paid.
4) The time of payment, delivery, or performance.

Question 14

Communication

Answer 14

The offer must be communicated to the offeree.

Question 15

What is revocation?

Answer 15

The offeror’s act of withstanding an offer.

Question 16

What is a counteroffer?

Answer 16

A rejection of the original offer and the simultaneous making of a new offer.

Question 17

What does the mirror image rule require?

Answer 17

That the offeree’s acceptance match the offeror’s offer exactly.

Question 18

When can a contract be terminated by operation of law?

Answer 18

1) Lapse of time
2) Destruction of the specific subject matter of the offer.
3) Death or incompetence of the offeror or the offeree
4) Supervening illegality of the proposed contract. (A statute or court decision that makes an offer illegal automatically terminates the offer)

Question 19

When can an offer be irrevocable?

Answer 19

Courts refuse to allow an offeror to revoke an offer when the offeree has changed position because of justifiable reliance on the offer (under the doctrine of promissory estoppel).

Question 20

What is an option contract?

Answer 20

An option contract is created when an offeror promises to hold an offer open for a specified period of time in return for a payment (consideration) given by the offeree.

Question 21

What is an acceptance?

Answer 21

An acceptance is a voluntary act by the offeree that shows assent, or agreement, to the terms of an offer.

Question 22

Can silence constitute an acceptance?

Answer 22

Yes and no.

Question 23

How must acceptance be communicated?

Answer 23

In unilateral contracts, the full performance of some act is called for and notification is unnecessary.

In a bilateral contract, communication of acceptance is necessary.

Question 24

What is the mailbox rule (deposited acceptance rule)?

Answer 24

Acceptance takes effect, and thus completes formation of the contract, at the time the offeree sends or delivers the acceptance via the mode of communication expressly or impliedly authorized by the offer.

Question 25

When does the mailbox rule not apply?

Answer 25

It does not apply to instantaneous forms of communication, such as when the parties are dealing face to face.

Question 26

What are authorized means of acceptance?

Answer 26

The offeror specifies how acceptance should be made, such as by overnight delivery, snail mail, FedEx. The contract is not formed unless the offeree used that mode of acceptance.

If the offeror does not expressly authorize a certain mode of acceptance, then acceptance can be made by any reasonable means.

Question 27

What are e-contracts?

Answer 27

Electronic contracts; they must meet the same basic requirements (agreement, consideration, contractual capacity, and legality) as paper contracts.

Question 28

How must an offer be displayed on an e-contract?

Answer 28

The seller’s web site should include a hypertext link to a page containing the full contract so that potential buyers are made aware of the terms to which they are assenting.

Question 29

What provisions must e-contract include?

Answer 29

Acceptance of terms, payment, return policy, disclaimer, limitation on remedies, privacy policy, and dispute resolution.

Question 30

What are click-on agreements?

Answer 30

The act of clicking on a box indicating “I accept” or “I agree” to accept an online offer.

Question 31

What are shrink-wrap agreements?

Answer 31

Is an agreement whose terms are expressed inside a box in which goods are packaged.

Question 32

Browse-wrap terms

Answer 32

like click-on agreements, browse-wrap terms can occur in a transaction conducted over the internet.

Question 33

What is an e-signature?

Answer 33

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.

Question 34

E-SIGN Act

Answer 34

Electronic Signatures in Global and National Commerce Act, which provides that no contract, record, or signature may be “denied legal effect” solely because it is in electronic form.

Question 35

What is a partnering agreement?

Answer 35

An agreement between a seller and a buyer who frequently do business with each other concerning the terms and conditions that will apply to all subsequently formed electronic contracts.

Question 36

What is the purpose of the Uniform Electronic Transactions Act (UETA)?

Answer 36

Is to remove barriers to forming electronic commerce.

Question 37

What is a record?

Answer 37

Information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable [visual] form.