Contracts — Formation of Contracts Flashcards
(26 cards)
Offer
An outward manifestation of intent to enter into a contract w/ specific terms
More than mere conversation
Advertisements
“invitation to offer” unless there are specific terms (e.g. the mink coat case)
Counteroffer
A response that changes a material term of the original offer, deemed a rejection then a new offer
Termination of an Offer
- Death
- Lapse of time (3 months unless specified)
- Rejection
- Counteroffer
- Revocation
Revocation
The offeror’s withdrawal of the offer before acceptance
Offers revocable unless:
* Option Contract (with additional consideration)
* UCC Firm Offer (writing signed by merchant)
* Unilateral Contract w/ Performance
Direct revocation
The offeror directly informs the offeree of the revocation, allowed before the offeree accepts
Indirect revocation
- The offeree learns the offer has been revoked through another source before responding
- Terminates offeree’s power of acceptance
Option Contract
1) Promise to keep Offer open
2) Additional Consideration
Firm Offer (UCC)
- offer made
- by a merchant (sale of goods) that is
- irrevocable for a specified time (time stated or a MAX time of 3 months)
- when writing signed by merchant
Once the period lapses, the offer merely becomes revocable
Unilateral Contract
A promise for an act
* performance is required for acceptance
* irrevocable once performance begins
Bilateral Contracy
Promise for a promise.
Mirror Image Rule
Acceptance must exactly match the terms of the offer
ONLY COMMON LAW
How to Accept
- Silence
- Performance
Mailbox Rule
Generally, acceptance is effective when SENT
BUT, If a Rejection is sent first, then an
Acceptance is sent, whichever arrives first
wins
UCC
Acceptance
i.e.
Liberally Construes as long as the material terms remain the same.
No Mirror Image Rule under Article 2
Exceptions:
1) Material alteration of terms
2) Objection in reasonable time
3) Offer limits acceptance
Consideration
A bargained-for-exchange relied on to legal benefit or detriment
Even a mere Peppercorn is enough (VALUE DOESNT MATTER)
Illusory promise
- Party making the Offer retains control
- A promise that looks valid but does not actually bind the promisor to any obligation.
The offeror is keeping control e.g. “I will sell you my car, when I decide to”
Modern trend Re: illusory promise
An illusory promise may be considered valid if it can be interpreted to create an obligation.
as there’s some way of interpretation, that the promise can be interpreted to be valid, it will.
Gift
- Promise to give a gift is NOT valid
Consideration - Already given gift IS valid Consideration
A promise to give a gift is invalid consideration, but giving the gift is enforceable.
Past or moral consideration
Not Valid Consideration
What happens if a promise is made to pay a debt barred by the statute of limitations?
The promise is valid consideration and enforceable.
Is a promise to pay a debt discharged by bankruptcy enforceable?
Yes, it is valid consideration.
What is forbearance to sue?
promise not to sue,
is valid consideration.
Promissory Estoppel
Detrimental Reliance
keep separate from consideration
NOT ACTUALLY CONSIDERATION, SO NOT A K.
