Business Law - Chapter 12

Agreement Elements

1. Mutual Assent, 2. Voluntary Consent, 3. Doesn't always require writing

Mutual Assent

offer and acceptance; parties have to be on the same page. Decided objectively, don't look inside the head, ignore bad bargains.

Offer

promise/commitment to do/refrain from doing specified action in future. 1. Offeror has serious intent to be bound, 2. Terms are reasonably detailed, 3. Offer must be communicated

Offeror

the person making the offer.

Offeree

the person receiving the offer and has the option to accept.

Common Law Offer

invalid contract if no price decided.

UCC Offer

gap filler provision; a contract can be concluded if nothing is said as to price, price is left to be agreed by the parties and they fail to agree, or the price is fixed through a market price.

UCC Contract

Requires that at minimum, the quantity must be decided.

Output Contract

exception to UCC contract; "I'll buy as much as you make." ALL counts as quantity. Ex: Farm production, you don't know how much they'll make.

Requirements Provisions

exception to UCC contract; "I don't know how much I need, but I'll buy as much as I need from you." Ex: Gasoline at a gas station.

Revocation

offer termination when the offeror changes the terms; REVOKED, "I take it back." Can only happen if the offeree hasn't accepted.

Rejection

offer termination when the offeree doesn't agree; REJECTION, "No thanks, not interested." If they change their mind later, the offeree becomes the new offeror.

Expiration

offer termination when the product expires (car, food, etc.)

Operation of Law

offer termination when one party dies or is mentally incompetent, or the product was destroyed in a tornado.

Option Contracts

mini-contract such that the original contract can't be revoked. Ex: "I'll pay you 50$ upfront" when forming a contract for a car.

Acceptances

must be clear and unequitable. Silence, counteroffers, and emojis don't count. A handshake on its own counts.

Specified Acceptance

you have to accept by their specific method, or it doesn't count.

Unspecified Acceptance

you can use any reasonable means to accept.

Mailbox Rule

drop mail in the mailbox => bounded in the contract. Unreliable because mail can get lost and take a long time to arrive. Later changed to when the mail is RECEIVED => bounded in contract. Also applies to emails.

Lucy v. Zehmer

after consumption of alcoholic beverages, Zehmer jokingly agreed to sell Lucy his farm for $50,000, signed the contract and made his wife sign the contract, but never gave it to Lucy. Lucy found it later and gave 5$ to Zehmer to bind the bargain, but Zehmer refused to accept because it was a joke. Ruled in favor of Lucy because the offer was present, there was serious intent (FACTS, NOT THE HEAD), and has reasonable terms.

Advertisements

Generally NOT an offer unless reasonably detailed.

Foster v. Ohio State University

OSU wrote to Foster offering him an appointment as a professor. Position began 7/1 and had until 6/2 to accept the job. On 6/2, Foster telephoned the dean and left a message accepting the position effective 7/15. This isn’t a contract because Foster made a counteroffer.