Chapter 14

Mirror Image Rule

A principle which holds that the terms of an acceptance must mirror the terms of the offer. If the terms of the acceptance do not mirror the terms of the offer, no contract is formed and the attempted acceptance is a counteroffer.

In a bilateral contract, the offeror is expecting what action from the offeree?

A return promise

Mailbox Rule

A rule which holds that an acceptance is valid when it is placed in the mailbox, whereas a revocation is effective only when received by the offeree. In some jurisdictions the mailbox rule has been expanded to faxes.

Acceptance

A key factor in the agreement element of a contract; consists of the agreement of one party, the offeree, to the terms of the offer in the contract made by the other party, the offeror.

Identify a scenario where the parties have agreed that the silence will be considered acceptance.

A person has a library subscription that is renewed automatically unless he or she explicitly asks to stop the subscription.

Option Contract

An agreement whereby the offeree gives the offeror a piece of consideration in exchange for the offeror's agreement to hold the offer open for a specified period of time.

If no means of communicating an acceptance is specified, what means will be accepted?

Any reasonable means including telephone, mail, fax, email and in person communication.

In general, what are the ways an offeree can manifest intent to enter into a contract? (Check all that apply.)

By giving the offeror a return promise (e.g., promise to pay contract value) By performance of the requested actions under the offer and contract

If the offer does not make it clear how the offeree should respond, in what way can the offeree respond under the contract? (Check all that apply)

By giving the offeror a return promise as consideration By performing the required acts of the contract

In the context of contractual offers, if an offeree changes his or her mind after dispatching a rejection by certified mail, what can the offeree do to ensure that the contract is formed?

Communicate acceptance by another mode of communication before rejection reaches the offeror.

What is the term for an offer made by the offeree to the offeror proposing a substituted bargain differing from the original proposed offer?

Counteroffer

What are methods by which termination of a contractual offer can occur? (Check all that apply.)

Counteroffer by the offeree Revocation by the offeror

An offeror may try to avoid being bound to a contract by later claiming she was only joking when she made the offer. Which of the following is an accurate statement regarding the willingness of a court to consider such evidence?

Courts are generally not interested in such evidence of hidden intent.

True or false: If the offeree makes a mistake and sends the acceptance to the wrong address, there is acceptance on dispatch.

False; Reason: In such a situation, there is no acceptance on dispatch; however, if a correction is made and the letter eventually reaches the offeror, the acceptance is valid on receipt, assuming the offer is still open.

Promissory estoppel requires what form of contractual mindset?

Detrimental reliance on the offer

In the absence of a description in the offer of what form of communication must be used to form a valid acceptance, what methods of communication are generally accepted as reasonable? (Check all that apply.)

Email communication Telephone communication In person communication

What type of contract is formed when the offeree receives the benefits of offered services with a reasonable opportunity to reject them and knows that some form of compensation is expected, yet remains silent?

Implied-in-fact

Communication

In a contract, an offer made to the offeree of the offeree's agent

material terms

In a contract, the terms that allow a court to determine what the damages are in the event that one of the parties breaches the contract; include the subject matter, quantity, price, quality, and parties.

Under what circumstances will an offeror not be able to rescind a unilateral contract offer?

In instances where the offeree has already started to perform under the contract

The creation of a valid contractual offer requires what elements?

Intent of the offeror for an agreement, definite terms and offer communicated to offeree

What form of intent must an offeror have in creating a contractual offer?

Intent to be bound by the offeree's acceptance

If a contractual offer becomes illegal, what is status of the offer?

It is immediately terminated.

In the context of contractual offers, which of the following statements best describes express authorization?

It is the specific mode of communication of acceptance that is stated in the offer.

Death of an offeror will have what effect on a contractual offer?

It will cause the offer to be terminated.

______ terms allow a court to determine damages if one of the parties breaches the contract.

Material

Under common law, what types of terms must be included in a valid contractual offer?

Material terms, all major items necessary for mutual consent that are clearly laid out

Which of the following is an element in the formation of a contractual offer?

Offer must include serious intent by the offeror to be bound to an agreement

Which party to a contract can revoke an offer at any time?

Offeror

Which party to a contract is said to be the "master of their offer"?

Offeror

Who has the power to decide by what means an offer can validly be accepted?

Offeror

What are the names of the parties that form a contract? (Check all that apply.)

Offeror Offeree

What conditions would legally cause an offer to be immediately terminated? (Check all that apply.)

Offeror loses legal capacity to be in a contract Death of the offeror

Who can accept a valid offer that will create a binding contract?

Only the offeree or his or her agent

What type of contract allows the offeree a fixed amount of time to consider an offer without the offeror being able to revoke the contract during that fixed period of time?

Option contract

What are some things that could be material terms in a valid contract? (Check all that apply.)

Price of goods Parties involved

As a general rule, what effect does silence have in formation of contracts?

Silence cannot be used to form a contract.

Rejection

Termination of a contract that occurs when an offeree does not accept the offer or terms of the contract.

Revocation

Termination of a contract that occurs when an offeror takes back the initial offer and annuls the opportunity for the offeree to accept the offer.

A valid contractual offer must be communicated to what party? (Check all that apply.)

The agent of the offeree who is acting on behalf of the offeree The offeree

Once an offeree rejects an option contact (a contract open for a predetermined period of time), what happens?

The contract is immediately terminated.

How would a court likely respond to an offeror's attempt to avoid contract liability by claiming she was merely joking when she made an offer to the offeree? (Assume the offeree accepted the offer based on the reasonable belief that the offer was legitimate.)

The court would enforce the contract, since courts are not usually interested in an offeror's hidden intent.

Under common law, what are the necessary elements of a valid contractual acceptance? (Check all that apply.)

The intent by the offeree to be bound by acceptance of contract. The acceptance will have the definite and certain terms of the offer.

If the subject matter of a contractual offer is destroyed, then what is the status of the offer?

The offer is immediately terminated.

A valid offer under common law requires which of the following elements? (Check all that apply.)

The offer must be properly communicated to the offeree. There must be definite and certain terms. You need the intent to be bound by an acceptance.

If an offer states that it is good for thirty days, what happens in thirty days if the offeree has not responded?

The offer terminates immediately.

If there is no stated period when the offeree must accept or reject an offer, when will the offer expire?

The offer will expire after a reasonable period of time.

Which of the following is not a basic common-law requirement for a valid acceptance?

The offeree's written acceptance, dispatched by certified mail, to the offeror

In the context of contractual offers, which of the following statements is true of unilateral offers?

The offeror must give the offeree a reasonable time to complete it if the offeree has begun performing.

definite and certain terms

The requirement, under common law, that a contract must include and clearly define all material terms.

Under the common law mirror-image rule, when is a counter offer formed?

When the offeree's acceptance does not include all of the terms of the offeror's offer

When is it reasonable to assume that the offeree's silence constitutes acceptance?

When the previous course of dealings between the parties have established such a pattern of behavior

Using the objective standard to establish contractual intent, courts are concerned with looking at which of the following? (Check all that apply.)

Words and documents in public from the parties regarding the agreement Actions and behavior of the parties in public regarding the agreement

Which of the following is an element for the creation of a valid contractual offer in common law?

You need the intent to be bound by an acceptance of the offeree.

In the event that a revocation of the offer is sent, but the offeree communicates acceptance to the offer before the revocation is received,

a valid contract has been formed.

If the offer merely authorizes certain modes of acceptance, but does not condition acceptance on the use of those modes, use of an unauthorized means of acceptance is: _______.

acceptable

Parties to a contract can agree before hand that the silence is a form of ______.

acceptance

Counteroffer

an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer

According to the Restatements of Contracts, if no mode of communication is specified in the offer, then ______.

any reasonable means of acceptance is valid

In a(n) ______ contract, the offeror makes a promise in return for a promise from the offeree. (Check the BEST answer)

bilateral

Under the Restatement (Second) of Contracts, if no mode of communication is specified in an offer, then acceptance: _______.

can occur through any reasonable means

Under common law, a valid contractual offer will be:_______. (Check all that apply.)

certain in its terms definite in its terms

Under the common law mirror-image rule, if an offer and acceptance do not have the exact terms in the contract, then the acceptance is treated as a(n) _______.

counter offer

In case of the death of the offeror, the offer terminates ______.

immediately

The means by which the offeree can communicate a valid acceptance to the offeror may be: _______. (Check all that apply.)

implied from the facts and circumstances surrounding the communication of the offer to the offeree expressly stated in the offer

In this case, a(n) _______ contract is created when the offeree is silent but receives a legal benefit.

implied-in-fact

Termination

in a contract, the point at which offer can no longer be accepted as part of a binding agreement or an offeree no longer has the power to form a legally binding contract by accepting the offer; can occur through revocation by the offeror; rejection by the offeree, death or incapacity of the offeror, destruction or subsequently illegality of the subject matter of the offer, or lapse of the time or failure of another condition stated in the offer

In instances where the offeree has already started to perform under the contract

no agreement, because Carol did not accept in the manner and time specified in the offer

If an acceptance is sent to the wrong address and never arrives at the correct address, then there is: ______.

no contract

A counteroffer is made from the ______ to the ______.

offeree; offeror

If it is not clear whether the ______ wants performance or a return promise, the offeree has the option of either performing or making a return promise.

offeror

The name of the party initiating an offer for a contract is the: _______.

offeror

Promissory estoppel is the contractual concept that: _______.

one party reasonably relied on another's promise and due to that reliance, the court won't allow the revocation of the offer now

Suppose Joseph calls Justin and says, "Justin, I've found someone else to do my woodwork for the winter, and I won't be needing you." A day later Joseph changes his mind and calls Justin and wants to hire him based on the previously discussed terms. This is a valid: _______.

rejection

If an offer is for a unilateral contract, the offeree can accept only by providing the requested performance. Suppose Bill offered to pay $500 to anyone who returned his lost dog to him. Mary could accept by:______.

returning the dog

As a general rule, ______ cannot be used to form a contract.

silence

Assume that an offer merely authorizes certain modes of acceptance, but does not condition acceptance on the use of those modes. In such a situation, if the offeree uses an unauthorized means of acceptance: _______.

the acceptance creates a valid contract upon receipt by the offeror

intent

the intended purpose or goal of an action, especially in a contract

As a general rule, a revocation of an offer is effective when ______.

the offeree receives it

In the context of a contractual offer, silence by the offeree can be interpreted as acceptance when ______.

the two parties have a long-standing relationship where rejection is immediately communicated by the offeree

In an option contract, the offeree gives consideration to the offeror: _______.

to have an offer that cannot be revoked by the offeror for a period of time

Under the mailbox rule, acceptance is valid: _______.

when it is mailed by the offeree

As a general rule, a revocation is effective: _______.

when offeree receives the revocation

Under the mailbox rule, a revocation is effective: _______.

when received by the offeree