Contract Law: Agreement, Offer, and Acceptance

Vocabulary flashcards covering the core concepts of mutual assent, offers, terminations, and acceptances in contract law.

Mutual Assent

The agreement between parties in contract formation, usually demonstrated through offer and acceptance.

Offer (Common Law Elements)

Under common law, an effective offer requires three elements: (1) the offeror must objectively intend to be bound by the offer, (2) the terms must be definite or reasonably certain, and (3) the offer must be communicated to the offeree.

Objective Theory of Contracts

The legal standard used to determine intent to enter a contract, assessing whether a reasonable person viewing the circumstances would conclude that the parties intended to be legally bound.

Business Transaction Presumption

The strong legal presumption that parties intend an agreement to be legally enforceable when entering into a business transaction.

Lucy v. Zehmer

A landmark case referenced regarding contractual intent and the application of the objective theory of contracts.

Problems With Intent

Circumstances where the required contractual intent is absent, specifically including offers made in anger or jest, expressions of opinion, and preliminary negotiations.

Definite Terms

A requirement for an offer to be effective, which generally must include essential terms such as the identification of the parties.

Communication of an Offer

The rule that an offer cannot be accepted if it has not been communicated to the offeree by the offeror.

Revocation of an Offer

The withdrawal of an offer by the offeror, accomplished by communicating the withdrawal to the offeree prior to acceptance.

Exceptions to Right to Revoke

Specific situations where an offeror's right to withdraw an offer is restricted: option contracts, promissory estoppel, and unilateral contracts.

Rejection of an Offer

Termination of an offer by the offeree, which is generally not effective until actually received by the offeror and turns any subsequent acceptance attempt into a new offer.

Counteroffer

A response by an offeree that contains terms and conditions different from or in addition to those of the original offer; it legally operates as a rejection.

Destruction of Subject Matter

An occurrence that automatically terminates an outstanding offer as a matter of law.

Advertisements (Contract Law)

Communications generally treated as invitations to make an offer, unless they are so specific that it is evident the advertiser intends to bind itself to the terms.

Acceptance

A voluntary act by the offeree—in the form of words or conduct—indicating agreement to the terms of the offer.

Mirror Image Rule (UCC Modification)

The common law rule requiring acceptance to match the offer exactly, which the Uniform Commercial Code (UCC) modifies for the sale of goods.

Acceptance by Silence

The general contract principle stating that silence cannot constitute acceptance, except in limited circumstances.