Midterm Review Flashcards
(31 cards)
What is a contract?
A promise or a set of promises for the breach of which the law gives a remedie, or the performance of which the law in some way recognizes as a duty
What are the two major remedies?
Specific performance & Monetary Remedies
How do you test the intent to enter a contract?
Apply an objective test
- How would a reasonable person understand the statement
- Exception is if the other party is made aware that it is a “joke” and not a serious offer
Is mental assent of the parties needed to form a contract?
No, if the words or other acts of one of the parties have but one reasonable meaning, his undisclosed intention is immaterial
What is an offer?
The manifestation 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 it
Section 17 (Offer)
The formation of a contract requires a bargain in which there is manifestation of mutual assent to the exchange and consideration
Section 22 (Offer)
- A contract requires a manifestation of mutual assent
- An agreement requires an offer followed by an acceptance
Section 24 (Offer)
A reasonable person in the position of the offeree would have understood that the offeror wanted to enter a bargain, and that there was nothing else to be discussed
Section 33 (Offer)
An offer must be complete, certain, and definite
What is the process of contract formation?
- Offeror makes an offer
- Offer gives the offeree the power to accept
- Once the offer is made there are several options
- Explicitly accept
- Explicitly deny
- Do nothing
- Make a counteroffer - If the offeree does anything but accept, the initial offer is gone
Are advertisements often considered offers?
NO
What can make an advertisement an offer?
- If it is clear, definite, explicit, and leaves nothing open for negotiation
- If it would lead a reasonable person to understand that an offer was intended
- If it invites a performance of a specific act without further communication and leaves nothing for negotiation
Section 30 (Acceptance)
- Acceptance must be knowing, voluntary, and a deliberate act (evaluated from an objective perspective)
- Acceptance can be by words or actions
- Acceptance must be made in a manner prescribed in the offer and on the terms prescribed in the offer
- If the offer is silent on the manner and type of acceptance, the offeree enjoys some flexibility in terms of how to accept and what they need to do to accept
Section 50 (Acceptance)
(1) Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by offer
(2) Acceptance by performance requires that at least part of what the offer requests be performed or tendered and included acceptance by a performance which operates as a return promise
(3) Acceptance by a promise requires that the offeree complete every act essential to the making of the promise
Section 64 (Acceptance)
Acceptance given by the telephone or other medium of substantially instantaneous two-way communication is governed by the principles applicable to acceptances where the parties are in the presence of each other
What is the Two-Prong Test for Section 64?
(1) The communication must be “substantially instantaneous”; and
- The transmission must occur within a
few seconds, or, at most, a minute or
two
(2) The communication must be two-way
- One party must be able to determine
whether the other party is away of the
first party’s communications, through
immediate verbal response, or when
the communication is face-to-face,
through non-verbal cues
Section 36 (Acceptance)
(1) An offeree’s power of acceptance may be terminated by:
(a) rejection or counteroffer by the offeree;
or
(b) lapse of time; or
(c) revocation by the offeror; or
(d) death or incapacity of the offeror or
offeree
(2) An offeree’s power of acceptance is terminated by the non-occurrence of any condition of acceptance under the terms of the offer
Section 43 (Acceptance)
An offeree’s power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect
Section 69 (Acceptance)
(1) Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only:
(a) Where an offeree takes the benefit of
offered services with reasonable
opportunity to reject them and reason
to know that they were offered with the
expectation of compensation
(b) Where the offeror has stated or given
the offeree reason to understand that
assent may be manifested by silence or
inaction, and the offeree in remaining
silent and inactive intends to accept
the offer
(c) Where because of previous dealings or
otherwise, it is reasonable that the
offeree should notify the offeror if he
does not intend to accept
Section 54 (1) (Acceptance)
- The offeror as the master of the offer can explicitly require or dispense of notification
- If the offer requires performance as the manner of acceptance and the offer is silent as to the notification, notification is not necessary
Section 54 (2) (Acceptance)
- If the offeree knows or has reason to know that the offeror has no adequate means of learning of the performance within a reasonable time, the contractual duty is discharged unless the offeree takes action to notify the offeror, the offeror finds out about that performance anyway, or the offeror indicates that not notification is required
Section 32 (Acceptance)
- In case of doubt, and offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance, as the offeree chooses
Section 45 (Acceptance)
- Where the offer invites acceptance by performance, once the offeree tenders or begins the invited performance, the offeror loses the ability to revoke
Section 62 (Acceptance)
(1) Where an offer invites an offeree to choose between acceptance by promise and acceptance by performance, the tender or beginning of the invited performance or a tender of a beginning of it is an acceptance by performance
(2) Such an acceptance operates as a promise to render complete performance
