BUS2001 Chapter 12: Agreement in Traditional and E-Contracts

Agreement

A meeting of two or more minds in regard to the terms of a contract; usually broken down into two events—an offer by one party to form a contract, and an acceptance of the offer by the person to whom the offer is made

Offer

A promise or commitment to perform or refrain from performing some specified act in the future

The three elements that are necessary for an offer to be effective:

1. The offeror must have a serious intention to become bound by the offer

2. The terms of the offer must be reasonably certain, or definite, so that the parties and the court can ascertain the terms of the contract

3. The offer must be communicated to the offeree

Some of the situations where intent may be lacking:

Expressions of opinion

Statements of future intent

Preliminary negotiations

Invitations to bid

Advertisements and price lists

Live and online auctions

The methods by which an offer can be terminated:

1. Termination by Action of the Parties

2. Termination by Operation of Law

The three ways an offer can be terminated by action of the parties:

1. Revocation

2. Rejection

3. Counteroffer

Revocation

In contract law, the withdrawal of an offer by an offeror

Option contract

A contract under which the offeror cannot revoke his or her offer for a stipulated time period and the offeree can accept or reject the offer at any time during this period

Counteroffer

An offeree's response to an offer in which the offeree rejects the original offer and at the same time makes a new offer

Unequivocal Acceptance (Mirror Image Rule)

A common law rule that that means that the person who accepts the offer cannot impose new conditions or change the terms of the original offer; otherwise, it is a counteroffer

The ways an offer can be terminated by operation of law:

Lapse of time

Destruction of the subject matter

Death or incompetence of the offeror or the offeree

Supervening illegality

Acceptance

The offeree's notification to the offeror that the offeree agrees to be bound by the terms of the offeror's proposal

Mailbox rule

A rule providing that an acceptance of an offer becomes effective on dispatch

E-contracts

A contract that is entered into in cyberspace and is evidenced only by electronic impulses (such as those that make up a computer's memory), rather than, for example, a typewritten form

At a minimum, an online offer should include the following provisions:

1. Acceptance of terms

2. Payment

3. Return policy

4. Disclaimer

5. Limitation on remedies

6. Privacy policy

7. Dispute resolution

Forum-selection clause

A provision in a contract designating the court, jurisdiction, or tribunal that will decide any disputes arising under the contract

Choice-of-law clause

A provision in a contract specifying that any contract dispute will be settled according to the law of a particular jurisdiction, such as a state or country

Click-on agreement

An agreement that arises when a buyer, engaging in a transaction on a computer, indicates his or her assent to be bound by the terms of an offer by clicking on a button that says, for example, "I agree"

Shrink-wrap agreement (shrink-wrap license)

An agreement whose terms are expressed in a document located inside a box in which goods (usually software) are packaged

Browse-wrap terms

Terms and conditions of use that are presented to an Internet user at the time a product, such as software, is downloaded but that need not be agreed to before the product is installed or used

Partnering agreement

An agreement between a seller and a buyer who frequently do business with each other on the terms and conditions that will apply to all subsequently formed electronic contracts

E-signature

As defined by the Uniform Electronic Transactions Act, "an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record."

Sue offers to sell Bob her laptop, but conditions the sale on Bob accepting the offer by March 1. Sue may revoke the offer:

A. Before Carol accepts the offer

B. Before May 1, whether or not Carol has accepted the offer

C. Only after May 1

D. Only after a reasonable period of time

A. Before Carol accepts the offer