Enforceable Contract Elements: Offer, Acceptance, Consideration & Capacity

Offer

Requirements of an offer: Contractual Intent, Complete and Definite, Communicated to the offeree.

What is not an offer

Made in jest/anger, Preliminary negotiations, Advertisement, Auctions, Social agreements.

When is an offer terminated

If the offeree rejects, Either party dies or loses legal capacity, Subject matter is destroyed or becoming illegal, Time expires (limit or reasonable period), Conditions not met.

Acceptance

Requirements: Came from offeree, In response to offeror, Matches terms of offer, Communicated to offeror.

Three ways to accept

1. Performance, 2. Promise, 3. Silence.

When an offer is accepted

Mailbox rule: once it is sent it is accepted.

Terms of acceptance

Must mirror the terms of the offer. If the terms do not mirror, there is no contract. Instead, a counteroffer.

When is the ability to accept terminated

Death or incapacity, Lapse of time, The offeree makes a counteroffer, Rejection or Revocation.

Consideration

What a person will receive in return for performing a contract obligation.

Requirements of consideration

Bargained for exchange, Legal Value, Legal detriment.

What constitutes a detriment

An act by the promisee, Forbearance by the promisee, Return promise by promisee, Act, Forbearance, or return promise by a third person, Promise or act by promisee delivered to a 3rd person.

What is not considered bargained-for

Promise to make a gift, Sham or nominal consideration, Illusory promise of good faith, Pre-existing duty.

Genuine Asset

Was there a true and complete argument? A tangible or intangible asset that has value derived from its physical properties or unique organizational characteristics.

Void contracts

Contract not enforceable, Rights cannot be transferred, Cannot be ratified, Mental Impairment, Undue Influence, Illegal contract.

Voidable contracts

Still a valid contract. Only one party is bound by contract terms. An unbound party can cancel and void the contract.

Types of illegal Contracts

1. Gambling, 2. Illegal Business, 3. Unsurious, 4. Commercial Bribery, 5. Restraint of Trade, 6. Illegal Marriages.

Void Vs Voidable

A void contract is invalid from the moment it was created, while a voidable contract is valid and enforceable until one party chooses to cancel it.

Capacity

Contracts entered into by either a minor or someone mentally incapable are not valid.

Mental incapacity

Can result from mental illness or defect or drug/alcohol intoxication.

Undue influence

One party takes advantage of another party's position of weakness, or one party breaches a fiduciary relationship with another.

Proper Form

Contracts that need to be in writing: 1. Suretyship, 2. Marriage, 3. Sale or transfer of loan, 4. One-year rule, 5. Sale of goods over $500, 6. Authorize or employ an agent for a real estate transaction.