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Business Law Ch 8
Summary of slides for Chapter 8 of Fundamentals of Business Law
| Question | Answer |
|---|---|
| What must a contract have? | Agreement, Consideration, Capacity, and Legality |
| What is an agreement? How many parts are to an agreement? | Parties mutually assent to the same bargain; 2 |
| What is/are the component(s) to an agreement? | Offer and Acceptance |
| Offeror | party making the offer |
| Offeree | party receiving the offer |
| Offer | Promise to do or not to do something in the future |
| What 3 elements does common law require for an offer to be valid? | 1. Offeror's serious intention 2. Reasonably certain terms 3. Communication of offer to Offeree |
| What must intent be? | reasonable, serious, and objective. follows the reasonable person standard |
| When is the intention requirement for a contract usually not met? | When offer is made in anger, jest, or excess excitement |
| Is an expression of opinion an offer? | No |
| Is a statement of future intent an offer? | No |
| Are preliminary negotiations or invitations to negotiate an offer? | No |
| Are advertisements an offer? | Generally not |
| What are agreements to agree? | Parties agree on some terms but not all yet. |
| Can agreements to agree be enforceable? | Yes, if the parties intend to be bound |
| What are reasonably certain terms? | terms definite enough so that a court can tell if a breach occurred |
| What are generally required defined terms in a contract (whether expressly stated or inferred)? | 1. identification of the parties 2. identification of the concerned subject matter 3. what consideration was given 4. time of payment, delivery, and/or performance |
| How is the communication of offer to offeree performed? | when the offer is made directly by offeror or through agents |
| How can an offer be terminated prior to acceptance? | termination by action of the parties or by termination as an operation of law |
| What is termination by action of the parties? | Revocation by the offeror, revocation, irrevocable offers, option contract, rejection of the offer by the offeree, and couteroffer by the offeree |
| Under revocation of the offer by offeror, the offer can be withdrawn when? | anytime before the offeree accepts the offer |
| When is revocation by the offeror effective? | when communicated to offeree or offeree's agents |
| What is revocation? | the offeror's act of withdrawing an offer |
| How can a revocation be made? | through communication (oral/written) or by performance inconsistent with the existence of the offer |
| How can an offer made to the general public be revoked? | In the same manner that the offer was made |
| What are irrevocable offers? | offers that, once made, cannot be revoked if the offeree has acted on justifiability of the offer (???) |
| What is an option contract? | where an offeror promises to hold offer open for a length of time in return for consideration (typically payment) |
| How can an offeree terminate an offer? | Through rejection of offer by "words of conduct" |
| When does the rejection of an offer by the offeree become effective? | when the rejection is received by the offeror or their agents |
| Does inquiry about an offer constitute as rejection? | no |
| What is a counteroffer by the offeree? | when the offeree rejects the original offer while simultaneously making a new offer |
| Mirror Image Rule | terms of acceptance must "mirror" the offer terms; if they are "materially" different, then the "acceptance" is actually a "counteroffer" |
| Where is the mirror image rule used and why? | Used by common law to define what is acceptance versus a counteroffer |
| How can an offeree's power to turn an offer into a binding contract be cut short? | 1. Lapse of time 2.Destruction of the specific subject matter of the offer 3. Death or incompetence of the offeror or the offeree 4. Supervening illegality of the proposed contract |
| After what period of time does an offer run out? | usually a specified time period; if no specified time period, then after a "reasonable" amount of time has passed as determined by the subject matter of the contract, market conditions, etc |
| What is an exception to death terminating an offer? | an irrevocable offer (passing onto heirs) |
| What is acceptance? | An unequivocal, voluntary act by the offeree which shows agreement to the terms of an offer |
| Can a 3rd party accept for an offeree? | Typically not. |
| Is "I accept" or "I accept if..." an unequivocal acceptance? | Only the first option is unequivocal acceptance |
| Can silence be acceptance? | Only if the offeree has a duty to speak (reject) |
| If an offeror has a term stating that silence is acceptance, is silence acceptance? | Not necessarily |
| How must acceptance be communicated in a bilateral contract? | Through direct communication because there is a mutual exchange of promises |
| How must acceptance be communicated in an unilateral contract? | Notification isn't necessary; acceptance is evident by performance |
| When is acceptance "timely" for bilateral contracts? | If made before offer is terminated |
| Mailbox rule | acceptance is effective when offeree uses authorized means of acceptance (express in contract or implied) |
| If no means are specified, how can acceptance be communicated or delivered? | Though any reasonable means |
| What are exceptions to the Mailbox rule? | if offeror specifies that acceptance will not be effective until received; if acceptance is sent after rejection, whichever is received first by offeror takes precedence; dealings in person, phone, or fax; emails if parties agree |
| What are authorized means of communication of acceptance? | methods expressly authorized by the offeror or implied by the situation |
| When acceptance is sent by means not expressed or implied, when does acceptance become effective? | Once it is received by the offeror |
| What are electronic contracts? | contracts involving the sale of goods or licensing of software |
| What do electronic contracts require? | same as normal contract: intent, agreement, consideration, capacity, legality |
| How should online offers be made? | By displaying the offer. The seller's website should have a hyperlink to a full contract in a readable form. |
| What terms should be in a contract for an online offer? | Acceptance of terms, payment method, return policy, disclaimer, limitation on remedies (if goods are defective or contract is breached), privacy policy, and dispute resolution |
| How do click-on agreements work? | When you click "I agree" you are accepting the terms of the contract |
| If someone does not read all the terms of an agreement before clicking "I agree" online, is the contract still enforceable? | YES |
| Shrink-Wrap agreements | contract terms are inside the box; by opening the box the party agrees to terms and will keep the merchandise |
| Are the terms in shrink-wrap agreements enforceable or unenforceable? | It's debated often, due to the inability to read terms prior to opening |
| Browse-Wrap terms | do not require assent to use product/software |
| Are browse-wrap contracts enforceable? | Usually not |
| What is an E-signature? | 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 |
| What is a digitized signature? | graphical image of a handwritten signature |
| What act gives e-signatures and e-documents legal force? | E-SIGN act (2000) |
| In order for e-signatures to be enforceable, what must the contracting parties have agreed to use? | electronic signatures |
| What are partnering agreements? | Parties frequently do business together and agree to the terms in advance in order to create efficiency |
| Uniform Electronic Transactions Act (UETA) | proposed law for adoption by state to treat electronic records the same as paper documents |
| What is a "record"? | information that is inscribed on a tangible medium or stored in electronic or other medium that is retrievable in visual form |
| If a state passes the UETA unmodified, does it have to follow E-SIGN? | No; state law governs |
| If a state passes the UETA with modifications inconsistent with E-SIGN, does it have to follow E-SIGN? | Yes; E-SIGN will be preempted |
| What are the requirements for states to enact alternative e-record and e-signature statutes? | the statutes must be consistent with E-SIGN act provision, they cannot give greater legal status to any one technology, and if created after 2000 the statute must refer to E-SIGN act |
| What is an agreement under the UETA? | agreed to conduct transactions by electronic means, but may be implied by conduct (ie an email address on a business card) |
| Under UETA, if a party has previously agreed, can they withdraw consent? | Yes; they can opt out |
| Does the UETA apply to wills or testamentary trusts? | No |
| What is attribution under UETA? | procedures to ensure the person sending an e-record is the same person whose e-signature is on the record |
| Under the UETA, does typing your name at the bottom of an email count as a signature? | Yes |
| If a persons name is not on the record, can it still have a legal effect binding the person under the UETA? | potentially; courts look at surrounding circumstances |
| Does the UETA control issues regarding agency, fraud, authority, forgery, and contact information? | No; state laws control these |
| Can notaries sign electronically under the UETA? | yes |
Created by:
fredrickss
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