Chapter 12: Formation of Contracts; Offer and Acceptance

Explain all the ways an offer can be terminated (6 ways)

1) Revocation of offer by offeror: Offeror can revoke the offer before it is accepted, and if this is done the offeree cannot create a contract by accepting the revoked offer. Only effective if it is made known to the offeree thru some form of communication. 2) Counteroffer by offeree: When the offeree purports to accept an offer but in doing so makes any change to the terms of the offer that rejects the original offer. 3) Rejection of Offer by Offeree: Offeree communicates rejection to offer to Offeror and thus the offer is terminated. 4) Lapse of Time: When offer states that it is open until a particular date, the offer terminates on that date if it is not yet accepted. 5) Death or Disability of Either Party: if either the offeror or offeree dies or becomes mentally incompetent before the offer is accepted, the offer is automatically terminated. 6) Subsequent Illegality: if the performance of the contract becomes illegal after the offer is made, the offer is terminated.

Divisible Contract

Agreement consisting of two or more parts, each calling for corresponding performances of each part by the parties.

Decide whether an offer contains definite and certain terms.

An offer is definite if the essential provision of the contract isn't lacking and there are no further negotiations or terms to discuss. Basically, a contract isn't definite unless it is unambiguous, clear as possible, and the parties' obligations and intents are clearly implied. EX: An offer to conduct a business as long as it is profitable is too vague to be a valid offer, therefore it is indefinite and uncertain.

Output Contract

Contract of a producer to sell its entire production or output to a given buyer.

Requirements Contract

Contract to buy all requirements of the buyer from the seller.

Offer

Expression of an offeror's willingness to enter into a contractual agreement.

Explain the implications of failing to read a clickwrap agreement.

It does not excuse compliance with its terms.

Explain what constitutes the acceptance of an offer

No particular form of words or mode of expression is required, but there must be a clear expression that the offeree agrees to be bound by the terms of the offer.

Firm Offer

Offer stated to be held open for a specified time, under the UCC*, with respect to merchants

Counteroffer

Proposal by an offeree to the offeror that changes the terms of, and thus rejects, the original offer.

Explain the exceptions the law makes to the requirement of definiteness

The law makes an exception to definiteness only if one of the variables discussed in the contract is impossible to determine definiteness of until a later time, and will DEFINITELY be ascertainable in the future. (i.e. market price, production, sales requirements, etc)

Acceptance

Unqualified assent to the act or proposal of another; as the acceptance of a draft (bill of exchange), of an offer to make a contract, of goods delivered by the seller, or of a gift or deed.