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Biz Law 7
Chapter 10
| Question | Answer |
|---|---|
| consideration | something of legal value that must support a contract in order for it to be enforceable |
| agreement | the manifestation by two or more persons of the substance of a contract; requires a meeting of the minds/mutual assent of the parties to perform current or future duties |
| contract | an agreement that meets certain additional legal criteria and is enforceable in a court of law |
| offeror | the party who makes an offer |
| offeree | the party to whom an offer has been made |
| offer | the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it |
| elements required for an offer to be effective (3) | the offeror must objectively intend to be bound by the offer, the terms of the offer must be definite or reasonably certain, and the offer must be communicated to the offeree |
| objective theory of contracts | a theory that says the intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties |
| express terms (4) | set forth in most offers and contracts to identify the parties, the subject matter and quantity of the contract, the consideration to be paid, and the time of performance |
| implied term | a term in a contract that can reasonably be supplied by the courts |
| advertisement | an invitation to make an offer, or an actual offer |
| reward | an award given for performance or some service or attainment; to collect a reward, the offeree must (1) have knowledge of the reward offer prior to completing the requested act and (2) perform the requested act |
| auction with reserve | an auction in which the seller retains the right to refuse the highest bid and withdraw the goods from sale; unless expressly stated otherwise, an auction is an auction with reserve |
| auction without reserve | an auction in which the seller expressly gives up his or her right to withdraw the goods from sale and must accept the highest bid |
| revocation | withdrawal of an offer by the offeror that terminates the offer |
| rejection | express words or conduct by the offeree that rejects an offer; rejection terminates the offer |
| counteroffer | a response by an offeree that contains terms and conditions different from or in addition to those of the offer; a counteroffer terminates the previous offer |
| option contract | a contract in which the original offeree pays consideration (usually money) in return for the original offeror giving consideration (time of the option period, keeping the offer open) |
| ways that an offer can be terminated by operation of law (4) | destruction of the subject matter, death or incompetency of the offeror or offeree, supervening illegality, lapse of time |
| supervening illegality | the enactment of a statute, regulation, or court decision that makes the object of an offer illegal; this action terminates the offer |
| lapse of time | a stated time period after which an offer terminates; if no time is stated, an offer terminates after a reasonable time |
| acceptance | a manifestation of assent by the offeree to the terms of the offer in a manner invited or required by the offer as measured by the objective theory of contracts; must be unequivocal (clear, unambiguous, having only one possible meaning) |
| mirror image rule | a rule that states that for an acceptance to exist, the offeree must accept the terms as stated in the offer |
| when silence constitutes acceptance (3) | the offeree has indicated that silence means assent, the offeree signed an agreement indicating continuing acceptance of delivery until further notification, and/or prior dealings between the parties indicate that silence means acceptance |
| mailbox rule (aka acceptance-upon-dispatch rule) | a rule that states that an acceptance is effective when it is dispatched, even if it is lost in transmission |
| proper dispatch | the proper addressing, packaging, and posting of an acceptance |
| authorized means of communication | an offeree must accept an offer by this; implied authorization may be inferred from what is customary in similar transactions |
| express authorization | an offer can stipulate that acceptance must be by a specified means of communication |
| consideration | something of legal value given in exchange for a promise |
| requirements of consideration (2) | something of legal value must be given, must be a bargained-for exchange |
| legal value | support for a contract when either the promisee suffers a legal detriment or the promisor receives a legal benefit |
| bargained-for exchange | exchange that parties engage in that leads to an enforceable contract |
| gift promise | a promise that is unenforceable because it lacks consideration; also known as a gratuitous promise |
| illegal consideration | a promise to refrain from doing an illegal act; such a promise will not support a contract |
| illusory promise | a contract into which both parties enter but one or both of the parties can choose not to perform their contractual obligations; thus, the contract lacks consideration; aka an illusory contract |
| preexisting duty | something a person is already under an obligation to do; a promise lacks consideration if a person promises to perform a preexisting duty |
| past consideration | a prior act or performance; past consideration (eg prior acts) will not support a new contract; new consideration must be given |
| accord | an agreement whereby the parties agree to accept something different in satisfaction of the original contract |
| satisfaction | the performance of an accord |
| promissory estoppel | an equitable doctrine that prevents the withdrawal of a promise by a promisor if it will adversely affect a promisee who has adjusted his or her position in justifiable reliance on the promise |
| output contract | contract in which a seller agrees to sell all of its production to a single buyer |
| requirements contract | contract in which a buyer contracts to purchase all of its requirements for an item from one seller |
| best-efforts contract | contract that contains a clause that requires one or both of the parties to use their best efforts to achieve the objective of the contract |
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eshoemak