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TD4 Flashcards

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1
Q

What are the 4 essential criteria of contract formation?

A
  • Offer ✅
  • Acceptance ✅
  • Consideration ✅
  • Lack of defenses ✅
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2
Q

What is an offer in contract law?

A

A manifestation of willingness to enter into a contract under specific terms.

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2
Q

Can there be ambiguity in the terms of an offer?

A

Yes – some ambiguity is allowed as long as the essential terms are definite.

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2
Q

Does an offer have to be completely clear?

A

No – it must be certain and definite enough for a judge to determine the terms from the parties’ interactions.

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2
Q

What determines whether an offer is definite enough?

A

Whether a reasonable person would understand the essential terms and intent to contract.

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2
Q

What is an acceptance in contract law?

A

A manifestation of assent to the terms of an offer.

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2
Q

Shylock texts Portia, “I am looking for someone to paint my house for $1,000. Are you interested?” Is this an offer?

A

Yes – It expresses a willingness to contract with definite terms (payment and service).

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2
Q

What are the four criteria for a valid acceptance?

A
  1. The offer must be known to the offeree.
  2. The acceptance must be communicated to the offeror.
  3. It can be accepted using any reasonable manner and by any medium reasonable under the circumstances.
  4. It must be unequivocal of each and every term of the offer (mirror image rule).
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3
Q

Antonio finds Stephano’s watch and returns it. Later, he sees a $100 reward post on Facebook. Can he claim the reward?

A

No – He didn’t know about the offer before completing the performance.

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3
Q

Can you accept an offer if you don’t know it exists?

A

No – The offeree must be aware of the offer when they accept it.

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3
Q

Must acceptance be communicated to the offeror?

A

Yes – Acceptance must be communicated unless it’s a unilateral contract where performance equals acceptance.

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3
Q

How must acceptance be communicated?

A

In a reasonable manner and using a reasonable medium under the circumstances.

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3
Q

What determines if the method of acceptance is reasonable?

A

Customary practices, industry standards, and the nature of the offer.

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3
Q

Can silence be acceptance?

A

Generally, no – unless the parties have established a pattern of accepting by silence.

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3
Q

What is the mirror image rule?

A

The acceptance must match the offer exactly – any new or different term creates a counteroffer.

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3
Q

What happens if the offeree changes a term in the acceptance?

A

It’s treated as a rejection and a counteroffer.

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3
Q

Shylock offers Portia $1,000 to paint his house by the end of the week. Portia replies, “Sure, but I can’t start until next week.” What is this?

A

Counteroffer – Portia’s response changes the terms of the original offer.

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3
Q

On Friday, Shylock replies, “OK, but you need to start Monday morning.” What is this?

A

Counteroffer – Shylock added a new term, rejecting the previous offer.

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4
Q

Portia then replies, “I will be there Monday morning. Have a great weekend.” Is there acceptance?

A

Yes – By agreeing to the terms without any new conditions, Portia has accepted the offer.

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4
Q

What must the offeree know before starting performance in a unilateral contract?

A

They must know about the offer.

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4
Q

When is a unilateral contract accepted?

A

Upon completion of performance.

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4
Q

What is a unilateral contract?

A

A contract that can only be accepted by performance (not by a promise).

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4
Q

What is a bilateral contract?

A

A contract where both parties exchange promises to perform.

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4
Q

Toyota advertises a free car to anyone who runs 100 miles. Joe runs 100 miles without knowing about the offer. Can he claim the car?

A

No – Joe didn’t know about the offer before starting performance.

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4
Antonio finds Stephano’s watch and returns it before knowing about the reward. Can Antonio claim the reward?
No – He must have known about the offer before completing performance.
5
When is a bilateral contract accepted?
When the offeree communicates acceptance of the offer’s terms.
5
Shylock texts Portia, “If you can paint the house by the end of the week for $1,000, let me know by Wednesday.” What type of contract is this?
Bilateral contract offer – Acceptance requires a return promise from Portia.
5
How is a counteroffer different from an acceptance?
A counteroffer modifies the terms of the original offer and is treated as a rejection of the original offer.
5
On Tuesday, Portia replies, “I can’t start until next week.” Is this an acceptance or a counteroffer?
Counteroffer – It modifies the original terms.
5
If Shylock replies, “OK, but you need to start on Monday,” is this an acceptance?
No – It’s a counteroffer because it adds a new condition.
5
What happens if the offeree rejects the offer?
The offer is terminated, and the offeree cannot later accept it.
5
What happens if the offeree doesn’t respond within the stated time limit?
The offer expires and can no longer be accepted.
6
Shylock asks Portia to respond by Wednesday. Portia responds on Saturday. Is there acceptance?
No – The offer expired after the Wednesday deadline.
7
What happens if the offeror dies or becomes insane before acceptance?
The offer is automatically terminated unless it’s part of an option contract.
8
What type of contract is formed if the offeree accepts by starting performance?
A unilateral contract – Acceptance happens when performance is completed.
9
What is the mailbox rule?
Acceptance is effective when it is dispatched, not when it is received.
10
What is an assignment of a contract?
An assignment of a contract is both an assignment of rights and a delegation of duties of that contract.
10
Are revocations subject to the mailbox rule?
No – Revocation is only effective when it is received by the offeree.
11
What are the essential steps to contract formation?
1. Offer 2. Acceptance (mirror image rule) 3. Consideration 4. Lack of defenses
12
Example of an assignment of a contract?
A contracts with B to paint A’s basement for $50. A can assign the contract to C, assigning A’s right to the $50 and delegating the duty to paint the basement.
12
How is a contract conventionally defined?
A contract is a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law recognizes as a duty.
13
Why is the definition of a contract circular?
A contract is a legally enforceable promise, but a promise is legally enforceable only if it is a contract.
14
What is a "promise"?
A promise is an assurance that a thing will or will not be done.
15
What distinguishes a mere statement of present intention from a promise?
A promise involves a commitment about a future event, not just a present intention.
16
What is the doctrine of consideration?
The doctrine of consideration determines the enforceability of promises based on whether something was exchanged.
17
What is consideration in contract law?
Consideration requires that a promise be the product of a bargain — an exchange of acts or forbearance.
18
What does consideration NOT require?
Consideration does not require equivalence in value between what is exchanged.
19
What is the function of consideration?
Consideration ensures that a promise is intentional and the result of reciprocal bargaining or negotiation.
20
Is a promise not to sue valid consideration?
Yes, a promise not to sue is valid consideration.
21
What is forbearance in contract law?
Forbearance is the act of refraining from doing something that one has the right to do — it counts as valid consideration.
22
What are three things that are not valid consideration?
1. Gifts 2. Past consideration 3. Performance of existing duties
23
Why isn’t a gift valid consideration?
A gift is not an exchange but a voluntary transfer, so it lacks the element of bargaining.
24
Why isn’t past consideration valid consideration?
Past consideration refers to actions or promises made before the contract — it’s not part of a present bargain.
25
Why isn’t the performance of an existing duty valid consideration?
If a party is already legally obligated to perform the act, it does not constitute new consideration.
26
What was missing in Portia’s tuition case under Anglo-American law?
No consideration because the promise to pay was made without an exchange.
27
Why wouldn’t Portia’s tuition case work under French law?
Even in French law, there was no valid consideration or exchange.
28
Why was Allen’s promise to John not enforceable?
The disclosure of “The Answer” was past consideration — it occurred before the promise.
29
How could John have fixed the consideration problem with Allen?
John could have proposed to give the idea in exchange for 25% of future profits before giving the idea.
30
Why didn’t John's support for Allen count as consideration?
John’s support was gratuitous and not in exchange for the promise to pay.
31
What is the timing requirement for valid consideration?
The promise and consideration must be part of the same exchange — not “consideration, offer, and acceptance.”
32
When would Sinbad’s demand for a bonus be enforceable?
If 10 crew members quit and Sinbad had to work harder, it would create a new contract with new consideration.
32
Why wasn’t Sinbad’s demand for a bonus enforceable?
Sinbad already had a preexisting duty to make the return voyage.
33
Why was there no valid consideration in Sinbad’s original case?
Sinbad was already obligated to complete the return voyage — no new consideration was given.
34
What are the key elements required for a valid contract under the doctrine of consideration?
1. Offer 2. Acceptance 3. Consideration 4. Lack of defenses
34
Why is consideration required for promises to be binding?
Consideration ensures that the promise is part of a reciprocal exchange, not just a casual or gratuitous statement.
35
What happens if there is no consideration?
Without consideration, a contract is not enforceable.
36
What type of consideration would make a future promise enforceable?
A future promise must be made in exchange for an act, forbearance, or another promise.
37
How does forbearance count as consideration?
Promising to refrain from a legal right (e.g., not suing) can be valid consideration.
38
Why isn’t the promise to pay Portia’s tuition valid consideration?
It’s a gift promise — there was no exchange or bargain involved.
39
What’s the main purpose of consideration in contract law?
To ensure that promises are made intentionally and as part of a reciprocal exchange.
40
How does consideration differ from a moral obligation?
Moral obligations are not legally enforceable because they lack reciprocal exchange.
41
Why didn’t Allen’s promise to John about "The Answer" hold up legally?
The promise was based on past consideration, which is not legally binding.
42
When does a preexisting duty become valid consideration?
If the duty is modified or increased (e.g., more work due to crew shortages).
43
What is the key element that makes a promise enforceable as a contract?
Consideration — the promise must be part of an exchange.
43
How does a counteroffer affect an offer?
A counteroffer rejects the original offer and creates a new offer.
43
Why wouldn’t promising to pay for Portia’s tuition after she’s already enrolled be consideration?
The promise to pay is not part of the original exchange — it’s a gift.

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