Business Law chapter 10

communication of acceptance

-bilateral contract -unilateral contract

communication of acceptance

-communication of acceptance no necessary if the offer takes away the requirement -if an offer can be accepted by silence, not communication is necessary

mode and timeliness of acceptance

-general rule -mailbox rule -express authorization -implied authorization

types of termination by operation of law

-lapse of time -destruction of the subject matter -death or incompetence of the offeror or offeree -supervening illegality of the proposed contract

3 elements necessary for an effective offer

1) a serious, objective intention by the offeror (intention of offeror is determined by what a reasonable offeree would conclude the words meant) 2) terms of the offer must be reasonably certain or definite so that the parties and the court can ascertain the terms of the contract. 3) offer must be communicated to the offeree ex. lost cat example from class

settlement of claims and consideration

1) accord and satisfaction 2) release 3) covenant not to sue

Offers can be terminated by

1) action of the parties 2) operation of law

3 exceptions to the rule that a contract is formed when the acceptance is sent by authorized means:

1) if the acceptance is not properly dispatched (insufficient postage for example) acceptance is not valid until actually received by the offeror 2) if offer specifies that the acceptance must be received by the offeror within a time period, to be effective the acceptance must be actually received by offeror within the time period 3) consideration: generally the value given in return for a promise. consideration myst result in a detriment to the promisee or a benefit to the promisor

elements of consideration

1) legally sufficient value 2) bargained

contracts that lack consideration

1) pre-existing duty rule 2) unforseen difficulties 3) recission 4) past consideration 5) illusory promise

_____ is the​ offeror's withdrawal of an offer that results in termination of the offer. A. Rejection B. Renunciation C. Revocation D. Rescission E. Remuneration

Revocation

Which of the following is an accurate statement regarding silence as​ acceptance? A. Silence usually constitutes a counteroffer. B. Silence is not usually considered acceptance. C. Silence usually constitutes a revocation of the offer. D. Silence usually results in the creation of a unilateral​ (one-sided) contract. E. Silence is usually considered acceptance.

Silence is not usually considered acceptance.

In​ a(n) _____, the seller expressly gives up his or her right to withdraw the goods from sale and must accept the highest bid. A. implied-in-law auction B. executed auction C. executory auction D. auction with reserve E. auction without reserve

auction without reserve

In​ a(n) _____, the seller expressly gives up his or her right to withdraw the goods from sale and must accept the highest bid. A. implied-in-law auction B. executed auction C. executory auction D. auction without reserve E. auction with reserve

auction without reserve

Unless otherwise expressly​ stated, an auction is considered​ a(n) _____. A. delegation of duties B. quasi-contract C. auction without reserve D. implied-in-law contract E. auction with reserve

auction without reserve

unilateral contract

because performance of an act is called for, notification is unnecessary unless: 1) offeror requests notice of acceptance 2) offeror has no adequate means of determining when the requested act has been performed 3) when the law requires notice of acceptance

bilateral contract

communication is necessary because the acceptance is in the form of a promise

release

contract in which one party forfeits the right to pursue a legal claim against the other party. releases are generally binding if a) given in good faith b) stated in a signed writing c) accompanied by consideration

A(n) _____ by the offeree simultaneously terminates the​ offeror's offer and creates a new offer. A. rejection B. rescission C. counteroffer D. condition subsequent E. revocation

counteroffer

A(n) _____ is a response by an offeree that contains terms and conditions different from or in addition to those of the offer. A. counteroffer B. revocation C. symbolic acceptance D. acceptance E. constructive acceptance

counteroffer

According to the mailbox​ rule, acceptance is effective when it is​ _____. A. contemplated B. communicated orally C. written in letter​ form, and inserted into an envelope suitable for mailing D. written in letter​ form, and prepared for delivery to the post office E. dispatched

dispatched

A(n) _____ authorization is a stipulation in an offer that says the acceptance must be by a specified means of communication. A. equitable B. express C. implied D. statutory E. quasi-

express

bargained

for exchange: this means that the consideration given by both sides was something that both sides bargained for

who can accept?

generally a third person cannot substitute for the offeree and accept an offer. except in very special circumstances, an offer is only valid to the person/people to whom it is made

pre-existing duty rule

if a promise is made to do something that you already have legal duty to do, this promise is not consideration. ex. law enforcement official captures a criminal and there is a reward. officer doesnt get the reward

mailbox rule

if an authorized mode of communication is in the mails, then an acceptance becomes valid when it is dispatched (placed in the mail), no when it is received by the offeror

illusory promise

if the terms of a contract are so uncertain that nothing has actually been promised, the promise is said to be illusory or without consideration and unenforceable

A(n) _____ authorization is a mode of acceptance that is implied from what is customary in similar​ transactions, usage of​ trade, or prior dealings between the parties. A. express B. statutory C. quasi- D. implied E. equitable

implied

​A(n) _____ term in a contract is one that can reasonably be supplied by the courts. A. designated B. formal C. implied D. stipulated E. expressed

implied

The​ acceptance-upon-dispatch rule is more commonly known as the​ _____ rule. A. probationary evidence B. implied-in-law C. parol evidence D. mailbox E. ​implied-in-fact

mailbox

accord and satisfaction

means of settling a claim in which a debtor offers to pay a lesser amount than the creditor purports to be owed. for accord and satisfaction to occur, the amount of the debt must be in dispute. if both sides agree as to the amount of the debt, there is no consideration on the part of the debtor due to pre-existing duty rule

For an acceptance to​ exist, the offeree must accept the terms as stated in the offer. This is called the​ _____ rule. A. mutual consideration B. parol evidence C. acceptance-upon-dispatch D. mailbox E. mirror image

mirror image

legally sufficient value

must be given in exchange for the promise

2 parts to an agreement

offer and acceptance

destruction of the subject matter

offer is automatically terminated if the subject matter of the offer is destroyed before the offer is accepted

lapse of time

offer terminates automatically by law when the time specified in the offer has passed

The​ _____ is the party to whom an offer has been made. A. offeror B. assignee C. delegator D. offeree E. assignor

offeree

death or incompetence of the offeror or offeree

offeree's power of acceptance is terminated when the offeror or offeree dies or becomes incompetent unless the offer is irrevocable, or substantial performance of a unilateral contract has occurred

The​ _____ is the party who makes an offer. A. offeree B. delegatee C. offeror D. assignor E. delegator

offeror

In an auction without​ reserve, the seller is the​ _____, and the bidders are the​ _____. A. delegatee; delegators B. principal; fiduciaries C. delegator; delegatees D. offeree; offerors E. offeror; offerees

offeror; offerees

In an auction without​ reserve, the seller is the​ _____, and the bidders are the​ _____. A. offeree; offerors B. ​delegator; delegatees C. principal; fiduciaries D. offeror; offerees E. delegatee; delegators

offeror; offerees

rejection

offers may simply by rejected by the offeree

promises enforceable without consideration

promissory estoppel (detrimental reliance): doctrine that applies when a promisor makes a clear and definite promise on which the promisee justifiably relies; such a promise is binding if justice will be better served by the enforcement of the promise

types of termination by action of the parties

revocation rejection counteroffer

supervening illegality of the proposed contract

statute or court decision that makes an offer illegal will automatically terminate the offer

The enactment of a​ statute, regulation, or court decision that makes the object of an offer illegal is known as a​ _____. A. post hoc ergo propter hoc B. judicial nullification C. supervening illegality D. legislative nullification E. preexisting illegality

supervening illegality

An offer​ _____ if the subject matter of the offer is destroyed through no fault of either party prior to the​ offer's acceptance. A. delays B. modifies C. continues D. renews E. terminates

terminates

Prior to acceptance of an​ offer, the death or incompetence of the offeror or the offeree​ _____ the offer. A. continues B. renews C. modifies D. delays E. terminates

terminates

unequivocal acceptance

the acceptance must be to the terms of the offer (mirror image rule) if the accpetance is subject to new conditions or if the terms of the acceptance materially change the offer, the acceptance may be deemed a counteroffer

silence as acceptance

the general rule is that silence by an offeree does not constitute as an acceptance of an offer even if the offer states that offeree's silence is acceptance

An offer to pay a reward​ (for example, for the return of lost property or the capture of a​ criminal) is an offer to form​ a(n) _____ contract. A. promise for a promise B. implied-in-law C. quasi- D. bilateral E. unilateral

unilateral

acceptance

voluntary act by the offeree that shows agreement to the terms of an offer

express authorization

when an offer specifies how acceptance should be made, both the offeror and offeree are bound in contract the moment the means of acceptance are used

implied authorization

when the mode of acceptance is not stated in the offer, whatever means the offeror used in communicating the offer to the offeree implies that the offeree can use the same or a faster means for acceptance. when parties are at a distance, mailing is impliedly authorized

unforeseen difficulties

when unforeseen difficulties that give rise to a contract modification are the types of risks ordinarily assumed in that business, the pre-existing duty rule will apply. however if the unforeseen difficulty is an unusual one (one that is not ordinarily assumed) then the contract modification may be valid

revocation

withdrawal of an offer by the offeror. unless the offer is irrevocable, it can be revoked at any time prior to the acceptance general rule: revocation becomes effective when the offeree receives it

_____ is 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​ _____ theory of contracts. A. Acceptance; uniform B. Acceptance; objective C. Revocation; subjective D. Acceptance; subjective E. Rejection; objective

Acceptance; objective

offer

a promise to perform or refrain from performing some specified act in the future

counteroffer

a rejection of the original offer and a new offer is made

recission

a remedy in which a contract is cancelled and both parties are returned to their positions before the contract was made. -when recision and the making of a new contract occur at the same time, the courts frequently are given a choice of applying the pre-existing duty rule or allowing the recission and new contract to stand

general rule

acceptance in a bilateral contract is timely if it is effected within the duration of the offer

According to the mailbox​ rule, what happens when an acceptance letter is dispatched​ (i.e., mailed) but lost in​ transmission? A. the offer is nullified B. the offer is revoked C. the acceptance constitutes a counteroffer​ (assuming the acceptance letter is eventually​ found) D. the offer is rejected E. acceptance is effective

acceptance is effective

If no time is​ stated, an offer terminates​ _____. A. within 180 days B. within 90 days C. after a reasonable time D. immediately E. within 30 days

after a reasonable time

covenant not to sue

agreement to substitute a contractual obligation for some other type of legal action based on a valid claim

past consideration

an act done before the contract is made -generally cannot be consideration for a later promise to pay for the act. you can bargain for something now, or in the future, but not for something in the past

agreement

an essential element for contract formation; a meeting of two or more minds in regard to the terms of a contract. there are 2 parts to an agreement

A contract requires which of the​ following? A. an offer and an acceptance B. an offer and a counteroffer C. a promise for a promise D. equal consideration E. a promise for an act

an offer and an acceptance