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Flashcards in Contract Formation Deck (14):
1

Contract Formation:

Formation of a contract requires a______ in which there is a ____________ to the exchange and a ___________.

Formation of a contract requires:

  1. a bargain in which there is
  2. a manifestation of mutual assent to the exchange AND 
  3. a consideration

2

Contract Formation:

bargain is __________.

Bargain: an agreement to exchange of:

  • Promise for a promise
  • Promise for a performance
  • Performance for a performance

3

 

Contract Formation:

Manifestation of mutual assent requires _____.

Manifestation of mutual assent requires

  • that each party either make a promise or begin to render a performance.
  • There needs to be a “Meeting of the Minds.”

4

Contract Formation:

Mutual assent means ______.

Mutual Assent: For a contract to be formed,

  • the parties must reach an agreement to which they “mutually assent.
  • This mutual assent is almost invariably reached through what are called “the offer” and “the acceptance.” 

5

 

Contract Formation: Mutual Assent

To determine mutual assent, you look to _______.​

Look to the Intent of Parties

Rule: Judge intent by whether reasonable person would understand contract to be made based on words and actions of the parties

  • Can only be judged by outward manifestation of words and actions.
  • NOT determined by secret intention of parties

 

6

Contract Formation: Mutual Assent

Intent of the parties is judged _________.

Intent of the partied is judged objectively

General Rule: Subjective intent of parties does not matter in contract formation. 

Test for intent: The objective measure of a party’s intention is, in most circumstances, what a reasonable person in the position of the other party would conclude that his objective manifestations of intent 

7

Contract Formation: Mutual Assent

Restatement § 19: Conduct as Manifestation of Assent says _____________.

Restatement § 19: Conduct as Manifestation of Assent: “The manifestation of assent may be made wholly or partly by written or spoken words or by other acts or by failure to act.”

(1) May be made

  • wholly or partly by written or spoken words OR 
  • by other acts OR 
  • by failure to act

(2) The conduct of a party is not a manifestation of his assent unless

  • he intends to engage in the conduct AND 
  • knows or has reason to know that the party may infer from his conduct that he assents

(3) The conduct of a party may manifest assent even though he does not, in fact, assent

8

Contract Formation: Mutual Assent

Restatement § 19: Conduct as Manifestation of Assent 

Manifestation of assent may be made by ________

Manifestation of assent may be made

  1. wholly or partly by written or spoken words OR 
  2. by other acts OR 
  3. by failure to act

9

Contract Formation: Mutual Assent

Restatement § 19: Conduct as Manifestation of Assent 

The conduct of a party is NOT a manifestation of his assent unless __________.

The conduct of a party is NOT a manifestation of his assent unless:

  1. he intends to engage in the conduct AND 
  2. knows or has reason to know that the party may infer from his conduct that he assents

10

 

Manifestation of mutual assent

usually takes the form of ___________.

 

Manifestation of mutual assent usually takes the form of an offer from one party followed by an acceptance by the other

11

If H announces to a group, "I will pay $1000 to anyone who tells me the name of the thief that stole my lawnmower last night."  

1) This is an example of a __________ contract.

2) If A speaks up and promises to tell H the name, has a K been made?  If yes, what kind would be made?  If not, then why?

This is an example of a unilateral contract, which can only be accepted by supplying the name.

 

A's promise to tell the name does NOT transform this into a bilateral contract. 

  • H's offer cannot be accepted by a promise to do what H is asking.  
  • H's offer can be revoked even after A makes the promise.  The contract can ONLY be accepted by providing the name.

12

EX:  If P is about to enter law school and plans to marry during the winter break.  His father offers him $1,000 if he postpones his wedding plans until after he has completed his first year.  P postpones his wedding as requested, but shortly thereafter P's father dies. 

Can P enforce his father's promise?

Yes, The father's death does not terminate the offer because P already accepted the offer prior to the father's death by postponing the wedding. P is entitled to the $1,000.

13

 

If an offeree has commenced, but not completed performance, can the offeror revoke the contract?

 

No, under R2d, an offer for a unilateral contract becomes temporarily irrevocable if the offeree has commenced but not completed performance.

 

*** NOTE: the offeree must have begun the actual performance requested and NOT just mere preparations to perform

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