Chopter 12

What is the definition of an agreement in contract law?

is a meeting of two or more minds regarding the terms of a contract. It involves two key events:

1. An offer made by one party.

2. Acceptance of the offer by the offeree.

An agreement does not necessarily have to be in writing, but both parties must show voluntary consent to the same bargain.

What are the key requirements for an offer to be effective in contract law?

1. Serious intention: The offeror must have the intention to be bound by the offer.

2. Reasonably certain terms: The terms of the offer must be definite enough to determine breach and provide an appropriate remedy.

3. Communication: The offer must be communicated to the offeree, making the offer known to them.

When is "intent" lacking in an offer?

1. Expression of opinion: Not an offer, but a statement of belief.

2. Statement of future intent: E.g., "I plan to sell my car in the future" is not an offer.

3. Preliminary negotiations: An invitation to discuss terms, not a firm offer. E.g., "Would you be willing to sell your car?"

4. Invitations to bid: Not an offer, but an invitation to submit offers.

5. Advertisements and price lists: Treated as invitations to negotiate, not offers.

6. Live and online auctions: Invitations to submit bids, the contract forms only when the offer is accepted.

What terms must an offer include for it to be legally valid?

A valid offer must include these terms:

1. Identification of the parties involved in the contract.

2. Identification of the subject matter of the contract, including specific details like goods, services, or land.

3. Consideration: The amount to be paid, or the value exchanged.

4. Time of payment, delivery, or performance: The timing of the contract's execution.

How can an offer be terminated by action of the parties?

1. Revocation: The offeror withdraws the offer before it is accepted.

2. Rejection: The offeree rejects the offer, which terminates the offer. Any future attempt to accept will be a new offer.

3. Counteroffer: The offeree rejects the original offer and proposes new terms, terminating the original offer.

What is the "mirror image rule" in contract law?

states that the terms of the offeree’s acceptance must exactly match the terms of the offer. Any change or addition to the offer constitutes a counteroffer, not an acceptance.

What is termination by operation of law?

1. Lapse of time: The offer automatically expires after a specified time or a reasonable period.

2. Destruction of the subject matter: If the subject matter of the offer is destroyed, the offer is terminated.

3. Death or incompetence: If the offeror or offeree dies or becomes incompetent.

4. Supervening illegality: If a change in law makes the contract's subject matter illegal.

What constitutes acceptance in contract law?

Acceptance is a voluntary act by the offeree, showing agreement to the terms of the offer. The acceptance must be unequivocal, meaning it cannot impose new conditions or change the terms of the original offer. Any deviation from the original terms constitutes a counteroffer.

How does silence function as acceptance in contract law?

Normally, silence does not constitute acceptance. However, silence can be considered acceptance if:

1. The offeree has had prior dealings with the offeror.

2. The offeree is expected to speak or take action.

Unilateral Contract

Acceptance occurs through the performance of an act. No notification is required unless specified by the offeror

Bilateral Contract

Acceptance is communicated via a promise. Notification of acceptance is necessary, and the contract is formed when the promise is made.

What is the general rule for the timeliness of acceptance in a bilateral contract?

In a bilateral contract, acceptance is timely if it is made before the offer is terminated. When the parties are not communicating face-to-face, the offeree should use an authorized method of communication, such as email.

What are e-contracts and their requirements?

agreements made online, evidenced by electronic impulses instead of paper. They must meet the same requirements as traditional contracts:

1. Agreement

2. Consideration

3. Contractual capacity

4. Legality
   E-contracts often involve disputes over terms and whether the parties voluntarily agreed to them.

What are click-on agreements and shrink-wrap agreements in e-contracts?

• Click-on agreements: The user accepts terms by clicking a box (e.g., “I accept”).

• Shrink-wrap agreements: The terms are inside the packaging, and by opening the package, the user agrees to the terms (common with software).

What is the issue with agreements to agree in contract law?

Agreements to agree are agreements where parties agree to settle terms at a later date. Courts increasingly enforce these as binding contracts if all essential terms are agreed upon, even if some minor details are pending.