Chapter 14
What does an agreement require?
Valid offer and valid acceptance.
Promissory estoppel requires what form of contractual mindset?
Detrimental reliance on the offer.
In a bilateral contract, the offeror is expecting what action from the offeree?
A return promise.
How is an offeror's intent to be bound by an agreement demonstrated?
Based upon how a reasonable person would interpret the offeror's words and actions.
Jason agrees to buy Sara's car for $10,000. However, Sara tells Jason that she will only sell the car to him if he pays $12,000. In this scenario, Sara makes a(n).
Counteroffer.
Offer made by the offeree to the offeror proposing a substituted bargain differing from the original proposed offer?
Counteroffer.
_______ is when the means by which acceptance can occur is expressly stated in the offer.
Express authorization.
In case of the death of the offeror, the offer terminates _______.
Immediately.
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.
Manifestation of offeror's intent to be bound:
Intent determined by objective, reasonable person standard. Preliminary negotiations and advertisements do not constitute offers.
According to the _______ rule, an acceptance is valid when the offeree places it in the mailbox, whereas a revocation is effective only when the offeree receives it.
Mailbox.
Does silence constitute acceptance?
No.
What is an element in the formation of a contractual offer?
Offer must include serious intent by the offeror to be bound to an agreement.
Rejection and counteroffer are _______.
Offeree issues.
Revocation and death/incapacity are _______.
Offeror issues.
Formation of a contract begins when the party initiating the contract, called the _______, makes an offer to another party, called the _______.
Offeror; offeree.
Macon is planning to buy Kevin's car for $15,000. He gives Kevin $1,500 to keep the offer open for 30 days. Kevin will deduct the $1,500 from the price of the car if Macon purchases the car within the 30 days. If Macon does not buy the car during that time, Kevin will keep the $1,500 and may then offer the car to someone else. Which of the following contracts does this scenario best illustrate?
Option contract.
Representation of an offeree's intent to be bound by terms of offer through either:
Performance or return promise.
What does not constitute an offer?
Preliminary negotiations and advertisements.
Definite and certain terms?
Price, parties, quality, quantity, and subject matter.
Auctions with reserve:
Seller merely expresses intent to receive offers. Seller/auctioneer may withdraw item from auction. Bidder/offeror may revoke bid.
Auctions without reserve:
Seller must accept highest bid. No withdrawal allowed.
All but which of the following is true regarding silence as a means of acceptance of an offer?
Silence can be acceptance if the offeror demonstrates the benefits of the offered services with reasonable expectation to be compensated.
Destruction and subsequent illegality are _______.
Subject matter issues.
Mirror Image Rule:
Terms of acceptance must be identical to terms of offer.
Under common law, if the offeree's acceptance with terms that are not identical to the offeror's terms, then which of the following is true?
The offeree's attempted acceptance is considered a counteroffer rather than an acceptance.
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.
As a general rule, revocation is effective:
When the offeree receives the revocation.
If nothing is stated to the contrary in the terms of an auction, the auction is presumed to be _______, which means that the seller is merely expressing intent to receive offers.
With reserve.
In an auction _______, the seller is treated as making an offer to accept the highest bid and therefore must accept it.
Without reserve.