chapter 14 legal business

Agreement

Consists of a valid offer and a valid acceptance

Elements of a Valid Offer

1. Intent (Offeror must show serious objective intent to be bound), 2. Definite and Certain Terms, 3. Communication (Offer must be made directly to the offeree)

Definite and Certain Terms

Common law rule that requires the court to be able to determine the damages if a party breaches the contract

Auctions

In an Auction With Reserve, the seller merely invites offers and can withdraw the item. In an Auction Without Reserve, the seller is making an offer to the highest bidder and must sell

Revocation

The offeror can revoke the offer at any time before it is accepted, regardless of how long they said the offer would stay open (unless there is an option contract)

Rejection and Counteroffer

A rejection by the offeree kills the offer immediately. A counteroffer is treated as a rejection and the simultaneous making of a new offer

Termination by Law

The offer ends automatically if: 1. The offeror dies or loses capacity, 2. The subject matter is destroyed, 3. The subject matter becomes illegal, or 4. A reasonable amount of time passes

Acceptance

The offeree's manifestation of assent to the terms of the offer. Silence generally does not count as acceptance unless there is a prior course of dealing

The Mirror Image Rule

The rule that the terms of the acceptance must exactly match the terms of the offer

The Mailbox Rule

Acceptance is valid when it is placed in the mailbox (dispatched). Revocations are only valid when they are actually received by the other par