ACCT352 Exam 3

Intoxication

-A contract entered into by an intoxicated person can be either voidable or valid. -The agreement may be voidable even if intoxication is voluntary intoxication if the person was intoxicated enough to lack mental capacity -The contract is enforceable if the person understood the legal consequences of the agreement despite intoxication

Bilateral Contract

-A contract formed by the exchange of promises by offeror and offeree -These exchanged promises count as valuable CONSIDERATION and result in an offer and acceptance (AGREEMENT), and thus, an enforceable contract -Performance of an act is not necessary TO FORM a valid contract, but the act must be completed to perform the contract

Void Contract

-A contract that has no legal effect; it never existed -Neither the offeror nor offeree is obligated to perform; neither party can enforce the contract

Minor's Right to Ratify

-A minor can ratify (accept) a contract that was previously unenforceable against the minor -Ratification must occur during age of majority otherwise the contract is not enforceable against minor. -Ratification should be expressly in writing or orally, or by implication based on minor's conduct

Contracts that cannot be disaffirmed

-A minor cannot disaffirm a contract for the "necessaries of life" (food, clothing, shelter, medicine, medical care, education, and other items considered necessary to the maintenance of life) -Minors must pay the reasonable value of necessaries of life

Past Consideration (Consideration is forward-looking, so past actions don't qualify)

-A prior act or performance is not consideration for a new contract -Example: Home Depot promises to pay Peter, a store manager, $100,000 upon his retirement for his 30 years of faithful service = contract?

Preexisting Obligation/Duty (No, he was already obligated to be there)

-A promise to do something the party is already to do -There must be NEW consideration given -Example: Peter is a store manager at Home Depot. On a very busy weekend at Home Depot, Peter threatens to call in sick unless he is given a $50,000 increase in pay. Peter's boss agrees to the pay increase = contract?

Counteroffer

-A response by an offeree that contains terms and conditions different from or in addition to those of the offer and thus terminates the offer. -Rejects the original offer from the offeror and substitutes a new offer from the offeree -The original offeree becomes the offeror and the original offeror becomes the offeree -Not effective until it is actually received by the original offeror

Infancy Doctrine

-Allows minors to disaffirm (cancel) most contracts they have entered into with adults -Under this doctrine contracts involving minors are voidable by the minor. This means the contract exists but the minor has option to enforce it or disaffirm it -An adult party cannot disaffirm the contract -Doctrine protects minors who would generally be overmatched by worldlier, more sophisticated adults -Age is determined objectively -If the contracting parties are both minors, either minor may disaffirm the contract

Ratification for Intoxication

-An intoxicated person may ratify a contract expressly or impliedly once sober. -Occurs when a person enters into a contract while intoxicated and fails to disaffirm the contract within a reasonable time after becoming sober. -Acts or conduct inconsistent with an intent to disaffirm will also ratify the contract.

Effective Offer

-An offer by which the offeror objectively intends to be bound by the offer -An offer that contains definite (or reasonably definite) terms (allows the court to determine if a breach has occurred) -The offer must be communicated to the offeree

Supervening Illegality

-An offer is automatically terminated if the offer is made illegal when, before the offer is accepted, legislation or a court decision make the offer illegal -If the law changes after the offer is accepted, there is agreement and the contract, if there is one, is likely enforceable

Lapse of Time

-An offer is terminated if it specifies that it is effective until a date certain, and that date passes without an acceptance from the offeree -If no time is stated, the offer terminates within a reasonable time as dictated by the circumstances

Gift (Gratuitous) Promises

-Are unenforceable due to lack of consideration -Because the promisor makes a promise to give the promisee something but the promisee is not required to do anything in return. That is, the promisor's promise is not induced by an act or promise of the promisee

Types of Illegal Contracts

-Contracts to commit crimes -Contracts in violation of usury laws (i.e. a law that sets an upper limit on the interest rate that can be charged on certain types of loans) -Contracts to engage in illegal gambling

Parent v. Pirozzoli

-Courts can't help you get back what you had when you did something illegal -"Leave you where I found you"

How a Minor should Disaffirm

-Disaffirmance may be done expressly -orally or in writing - or impliedly by the minor's conduct -But disaffirmance must be done before the minor reaches the age of majority "plus a reasonable time" thereafter -The minor must disaffirm the entire contract, not merely a portion of it

Extrinsic Evidence

-Evidence not found in the contract but used to interpret the contract -Usually not allowed by courts, except to interpret an ambiguous contract -When a contract is clear and unambiguous, a court cannot consider extrinsic evidence.

Rules utilized by courts to interpret contracts

-Extrinsic Evidence -Ambiguous Terms -Trade usage, prior dealing, and course of performance

Disaffirmance for Intoxication

-If a contract is voidable because one party was intoxicated, that person must disaffirm while still intoxicated or within a reasonable time after becoming sober. -The person claiming intoxication typically must be able to return all consideration received. -Contracts for necessaries are voidable, but the intoxicated person is liable in a quasi contract for the reasonable value of the consideration received.

Bilateral Contract

-If offer requires an ORAL ACCEPTANCE then the offer is accepted when the acceptance is heard by the offeror -If offer requires ACCEPTANCE BY WRITING, then the offer is accepted when the acceptance is dispatched (sent) to the offeror. This is the so-called Mailbox rule

Adult's Duty of Restitution

-If the minor disaffirms the contract, the adult must make the minor whole -This means the adult must return to the minor whatever consideration was transferred to that adult by the minor -The consideration must be in the same condition or at the same value as when the minor transferred it to the adult

Prior Dealings

-If the offeror and offeree have prior dealings, the offeree has the duty to reject or risk being bound by his silence. -Exception to Silence as Acceptance rule

If a contract has an illegal purpose

-It is void -Neither party to that contract can enforce it -The effects of that illegal contract, if it is partially performed (executory) or fully performed (executed) cannot be reversed. That is, the courts will refuse to enforce or rescind an illegal contract and will leave the parties where it finds them

Agreement

-Manifestation by two or more persons of the substance of a contract -The process begins when one party makes an offer, and concludes when that offer is accepted by the other party -This offer and acceptance must evince mutual assent (meeting of the minds) by the offeror and the offeree to perform current or future contractual duties -Creates private law between the parties that the courts will attempt to honor in the event of a dispute

Unequivocal Acceptance

-Must accept using clear and unambiguous language - Example: "I accept your offer" NOT "I don't know. Let me think about it." -Acceptance must have only one possible meaning - Example: "I accept your offer" NOT "I accept your offer but is $25,000 the most you can offer?"

Requirements to Establish Promissory Estoppel

-Must be a clear and definite promise. -Promisee must justifiably rely on the promise. -Promisee reasonably relied on the promise by acting or refraining from some act. -The promisee's reliance was definite and resulted in a substantial detriment. -Justice will be served by enforcing promise.

Illusory Promise (not a contract because it was left open-ended)

-One or both of the parties can choose not to perform their contractual obligations -Example: Mary promises to pay Jane $1,000 if Jane paints Mary's barn on Saturday, but Mary will pay only if Mary's in the right mood on Saturday = Contract?

Parent's Duty to Support Child

-Parents have a duty to support their children and therefore are liable for their children's contracts for necessaries of life if they have not adequately provided such items -So an adult can sue a parent to obtain compensation for necessaries of life provided to a minor -Parent's duty to support terminates if a minor becomes emancipated (i.e. voluntarily leaves home and lives apart from her parents)

Consideration

-Something of legal value exchanged by the offeror and offeree that is bargained for so that it is the inducement for the parties to enter into an agreement -Could take the form of money, personal property, real property, services, two promises (bilateral contract) or forbearance (Refraining from an action that one has a legal right to undertake (e.g., "Jill, I promise to pay you $5000 if you do not marry Jack"))

Adjudged Insane

-Standard of Insanity -Declared legally insane by a court or administrative agency -Contract is void. Parties cannot enforce the contract

Insane, but not adjudged insane

-Standard of Insanity -Contract is voidable and can be disaffirmed by the insane person

Mirror Image Rule

-Terms of the acceptance must be the same as the terms of the offer. -Any attempt to modify the terms of the offer converts the acceptance into a COUNTEROFFER -A counteroffer terminates the original offer and must now be accepted by the original offeror, or not

Voidable Contract

-The contract exists. Contract is in effect, but offeror or offeree can avoid contractual obligation because of a defect with the contract -For example, a party who is a minor or who is insane lacks the capacity to enter into a contract and, by law, has the option of accepting a contract or voiding it

Minor's Duty of Restoration

-The obligation to return the consideration received from the adult. -General Rule: If the minor receives consideration from the adult, the minor must return to the adult the thing the minor received from the adult but she need only return it in the condition it is in at the time of disaffirmance

Rejection

-The offeree or an authorized representative can reject the offer by communicating such rejection by express words or by her conduct. -Not effective until it is actually received by the offeror

Unilateral Contract

-The offeror's offer can be accepted only by the performance of an act by the offeree. -Accepted when the bargained for act is performed

Examples of Contracts in everyday life

-Use of utilities -Swiping debit or credit card for purchases at restaurants, stores, doctor visits, etc. -Taxi ride -Borrowing a book from library

Exception to Mailbox Rule

-When a rejection is mailed before the acceptance is mailed -The Mailbox Rule does not apply if an offeree mails the rejection before she mails the acceptance and the acceptance is mailed before the offeror receives the rejection -In a case like this it becomes a RACE to the offeror. Whichever gets there first governs

Revocation

-Withdrawal of an offer by the offeror which terminates an offer -An offeror can terminate the offer by withdrawing it anytime before it is accepted by the offeree -Must be communicated to the offeree, but could be done directly by offeror or indirectly through a third party -Not effective until it is actually received by the offeree

Offeree (promisee)

-the party to whom an offer is made -has the power to accept the offer and, if she accepts, establishes agreement and establishes a contract, if the other elements of a contract are present

Executed Contract

A completed contract because it is fully performed by both parties .

Express and Implied

A contract can be a mixture of an ___________ and an ___________ contract—with some express terms and implied terms.

Valid

A contract with agreement, consideration, contractual capacity, form, and legality.

once they're 18

A minor can ratify a contract anytime but only it only becomes enforceable...

she does not disaffirm it while she is a minor or a reasonable time thereafter

A minor is deemed to have ratified a contract if...

-The minor's reckless conduct caused the loss of value to the adult's property or -The minor misrepresented her age to the adult (Minor who misrepresented can disaffirm, but must return property in its original state)

A minor who disaffirms has no duty of restitution UNLESS:

Option Contract

A type of irrevocable offer that is held open for a specified period of time in return of consideration.

-Mary must make the promise -Bilateral Contract

Acceptance Example #1: Jane promises to pay Mary $50 if Mary promises to mow Jane's lawn on Saturday morning. What is required for Mary to accept Jane's offer? What type of contract is it if Mary accepts Jane's terms?

-No, Mary has to mow the lawn first -Unilateral Contract

Acceptance Example #2: Jane promises to pay Mary $50 if Mary mows Jane's lawn on Saturday morning. Mary says "OK. I will mow your lawn on Saturday morning. Is Jane's offer accepted? What is required for Mary's acceptance? What kind of contract is it if Mary accepts Jane's terms?

Conditions or Exceptions

Acceptance must not contain...

Contract vs. Agreement

Agreement conveys that the parties have a mutual understanding about the essence of the contract. That is, they mutually assent (agree) to the terms of the contract, but there is no contract until the other elements of a contract are satisfied.

Contract

An agreement voluntarily entered into by parties which creates obligations enforceable by law

-Identifies the parties -Identifies the subject matter and quantity -Specifies the consideration to be paid -Specifies time of performance (payment date; acceptance; delivery date)

An offer contains definite terms if it:

a revocation is received by the offeree

An offer is deemed accepted if the acceptance is dispatched before...

Unenforceable

An otherwise valid contract that is rendered unenforceable by some statute or law.

Minors Insane persons Intoxicated persons

Anyone can enter into a contract except the following persons who lack contractual capacity because they are unable to fully understand the nature and consequences of their actions:

Death or Incompetence of the Offeror or Offeree

Automatically terminates the offer unless it is an irrevocable offer.

Trade usage, prior dealing, and course of performance

Can be used to clarify the contract.

Irrevocable Offers

Cannot be revoked

Implied (In Fact) Contract

Conduct creates and defines the terms of the contract.

Enforceable

Contract contains all necessary elements and there are no defense against enforcement.

Executory Contract

Contract is not completed because one or both parties has not performed the terms of the contract

Sufficiency

Does not refer to the amount or adequacy of the consideration. It refers to whether: A party suffers a Legal Detriment (refraining from doing something that one has a legal right to do or doing something that one is not legally obligated to do) OR A party receives a Legal Benefit (obtains something that she had no prior legal right to obtain)

Promissory Estoppel (detrimental reliance)

Even though a party does not provide consideration, a contract is deemed to have nonetheless been formed if the promisee, to promisee's detriment, reasonably relied on the promisor's promise

Because an irrevocable offer is not considered personal (i.e. the obligations can be performed ONLY by the parties and that cannot be passed on to their heirs, guardians, or estates) to the contracting parties but a revocable offer is.

Example of Options Contract: Jill offers to sell her home to Jack for $500,000. Jack pays Jill $20,000 so that Jill will keep the offer open for 12 months. Even if, for example, Jill dies before the 12 months have lapsed, Jack can accept the offer and Jill's heirs will have to sell the house to Jack. Why?

(-Jack has given nothing to Jill -Jill does not have to give Jack the money bc there was not exchange -BUT court might say that even though there's no contract she could have told him she wouldn't give the money and knew that he was relying on her promise -No contract but go through it as if there were)

Example of Promissory Estoppel: Jill says to Jack, her nephew, I will give you $10,000 when you turn 20 years old. Two days later, Jack informs Jill, he plans to buy a brand new car with the $10,000. A year later when Jack turns 19 years old, he informs Jill that he cannot wait any longer and that he has borrowed money from his best friend to purchase the car and that he will repay his friend when he receives the $10,000 from Jill when he turns 20 years old. A year later, when Jack turns 20 years old, Jill refuses to give Jack the money = Does Jill have to pay Jack? In other words, is the promise to give Jack $10,000 an enforceable contract?

Minor's Duty of Restitution Example

Example: Minor buys Corvette from Adult for $30,000 in 2016. Minor is 17, but she informs adult that she is 21 years old. Also, Minor drives Corvette for several months during which time she drove the car on dirt roads, often racing with her buddies. Minor disaffirms. The car is now worth $10,000 due the substantial wear and tear from Minor's reckless driving = Minor must pay Adult $20,000 in restitution since Minor's reckless conduct caused the loss of value to Adult's Corvette and also because Minor misrepresented her age

Minor's Duty of Restoration Example

Example: Minor buys Corvette from Adult for $30,000. Minor drives Corvette for several months but disaffirms when the Corvette is worth $20,000. Minor returns the Corvette worth $20,000 to the adult but gets back the $30,000 she paid the adult

Adult's Duty of Restitution Example

Example: Minor sells his inherited Corvette worth $30,000 to Adult in 2016. In 2017, when the Corvette is worth $20,000, Minor disaffirms. Adult must return the Corvette and $10,000 to Minor

Silence as Acceptance

Generally, silence (or inaction) cannot constitute acceptance because an offeree is under no legal obligation to say anything about an offer. An offer is NOTHING without the offeree's acceptance.

No (you get the gift and don't have to do anything in return)

Gift Promises Example #1: I will give you $10,000 when you turn 20 years old = Consideration?

Yes( both are doing/getting things of value)

Gift Promises Example #2: I will give you $10,000 when you turn 20 years old if you continue to visit me every weekend = Consideration?

Jill can't get her money back because she didn't have to give it to him

Gift Promises Example: Jill says to Jack, I will give you $10,000 when you turn 20 years old. At 20 years old Jill gives Jack $10,000 = Is this an enforceable contract? Can Jill get her money back?

Revocation, Rejection, or Counteroffer

How Can a Party Terminate an Offer?

Objective intent is determined by the reasonable person standard (What would the reasonable person in the position of the contracting parties have intended?)

How is objective intent determined?

Each party must give consideration

If A promises B movie tickets in exchange for B's promise to mow his lawn, the movie tickets would be consideration for the promise to mow and the promise to mow is consideration for the tickets.

Mailbox Rule

If the offer requires that an acceptance be in writing, then the acceptance is effective when it is dispatched (placed in the mailbox). The offer is accepted even if the acceptance is lost in transmission and does not reach the offeror.

unequivocal acceptance

In acceptance there must be...

Objective intent example (Ch11 slides 14&15)

In determining the objective intent of the parties the court might note that Jill would not have rented a house for eight months and paid a higher rent unless she was under the belief that the house would have been completed in eight months.

the subjective intent of the parties

Intent is judged by the reasonable person (objective) standard and not by...

No (don't have a common understanding)

Jane has a green 1999 Toyota Prius and a green 2012 Toyota Prius. Jane offers to sell her green 1999 Toyota Prius to Mary for $15,000. Mary accepts Jane's offer but thinks she is buying the 2012 Prius = Agreement?

Yes

Jane offers to sell her green 2012 Toyota Prius to Mary for $15,000. It is a car Mary has been constantly asking Jane to sell to her. Mary accepts Jane's offer by paying Jane $15,000 = Agreement?

So there is no acceptance, and thus no agreement and thus no valid contract until Jane repairs the broken windshield

Jane promises to pay Mary $1,000 if Mary repairs Jane's broken windshield. Jane's offer is not accepted until Mary actually repairs the windshield.

Executory Contract Example

Jane promises to pay Mary $10,000 if Mary promises to repair Jane's broken windshield. Mary promises to repair the windshield. Jane has not paid Mary $10,000. Contract is executory because Jane has not, as she promised, paid Mary $10,000 after Mary promised to repair windshield

Executed Contract Example

Jane promises to pay Mary $10,000 if Mary promises to repair Jane's broken windshield. Mary promises to repair the windshield. Jane pays Mary $10,000. Contract is executed because Jane, as she promised, pays Mary $10,000 after Mary promised to repair the windshield

Example of Bilateral Contract

Jane promises to pay Mary $10,000 if Mary promises to repair Jane's broken windshield. Mary promises to repair the windshield. Valid contract is formed at the time the exchange of promises occurs. So Mary is obligated to pay and Mary is obligated to repair.

Prior Dealings Example

Jill has purchased Coca Cola from Jack for 15 years. Jack cannot deliver Coke on the next delivery and informs Jill he will deliver Pepsi Cola instead. Jill, because of her prior dealings with Jack, might be under the obligation to affirmatively reject Jack's offer

Yes (the offeror heard the offer so it was received)

Mary and Jane are in Mary's living room. Mary says to Jane, I will buy your green 2012 Toyota Prius for $25,000 = effective communication of offer?

No (not effective because it was never received)

Mary mails a letter to Jane in which Mary states "Jane, I Mary, will buy your green 2012 Toyota Prius for $25,000." Jane relocates and never receives the letter = effective communication of offer?

No (against public policy)

Mary promises to hire Jane if Jane promises never to serve on a jury. Mary promises never to serve on a jury = Contract?

Yes. Voluntary exchange of promises by Mary and Jane

Mary promises to repair Jane's broken windshield if Jane promises to pay Mary $500. Jane promises to pay Mary $500 = Consideration?

Bargained-For Exchange

Means the parties negotiated and thereafter agreed to the exchange of consideration before the exchange occurred and the process of bargaining was the inducement for the offeror to make the offer and for the offeree to accept the offer

Bargained-for Exchange

Means there was a negotiation during which the parties voluntarily agreed to the exchange.

Destruction of Subject Matter

Offer is terminated if subject matter is destroyed before acceptance(Bilateral and Unilateral)

Agreement

Parties each consent to give up something of value in exchange for something of value

Contractual Capacity

Parties must have the legal capacity to enter into a contract in order for a contract to be enforceable against them. Minors or persons adjudged to be insane do not have this because they are deemed, by law, to be incapable of exercising the judgement necessary to enter into a contract.

Mary needs to know that the car was sold; if she doesn't receive the notification that it was sold there could be legal liability

Rejection Example: Mary Offers to buy Jane's Prius for $25,000. Jane responds "I reject that offer;" OR Jane responds "I don't like that deal;" OR Mary learns that Jane sold the car to Bill

Jack can't revoke the offer because the offeree never can and Jill can revoke the offer before Jack accepts it (accepted once he pays her; unilateral contract)

Revocation Example: Jill offers to sell her car to Jack if Jack pays her $50,000. When can Jack revoke? When can Jill revoke?

disafirm the contract

Sane party cannot...

Offer

Shows the willingness of a party to enter into a bargain, and justifies another person's understanding that her assent to that bargain is invited and will result in agreement

Termination by Operation of Law

Supervening Illegality; Destruction of the Subject Matter; Death or Incompetence of Parties

non-breaching party

The _________________ __________ can file a civil lawsuit to recover any damages resulting from the breach of contract.

Consideration

The bargained-for exchange of something of value in return for something of value; things of value include money, services, goods, promises

Consideration Bottom Line

The bottom line is that the smallest thing can count as consideration. Courts are not going to remake contracts even though they do not appear to be good ones EXCEPT when there is evidence of fraud or duress or of something that made this "not a real bargained-for-transaction."

Legal Value

The consideration the parties have exchanged is lawful and sufficient.

Private Law

The contract is ____________ ________ between the parties reflecting the mutual obligations the parties voluntarily assigned to each other.

Gift Promises, Illusory Promise, Preexisting duty, Past consideration

The following lack Consideration:

Minor's Duty of Restitution

The obligation to place the adult in a position the adult was in prior to the contract. That is, to return the thing received in the condition it was in before the contract was entered into.

it is actually received by the offeree

The offer must be communicated by the offeror (or an authorized representative) to the offeree (or an authorized representative), but the offer is not effective until...

Lawful Object

The subject matter of a contract must be legal. A contract to accomplish something illegal or against public policy is void.

irrelevant

The subjective intent of the parties to the contract is not considered - Subjective intent is...

Express Contract

The terms of the agreement (oral or written) are explicitly stated.

Agreement

There is ________________ when there is an offer by offeror and an acceptance of the offer by the offeree. BUT the offeror and offeree must mutually assent (agree) to the terms of offer.

Lawful Contract

To be enforceable, a contract must not concern an illegal purpose

-The words and conduct of the parties during the making of the contract -The circumstances surrounding the making of the contract

To determine the objective intent of the parties, the court will look at:

Objective intent of the parties

To determine what the parties intended the courts will look to the...

Because offeror has the power to set the terms of acceptance (So, if the offer states "Mary must accept using US Mail," Mary must accept using US Mail. The acceptance is not valid if US Mail is not used because the offeror made acceptance by US Mail an important condition of the offer)

Under the Mailbox Rule the acceptance must be "dispatched" in the way expressly authorized in the offer. WHY?

Yes (she hasn't started yet so she has not accepted the contract yet)

Unilateral Contract Example 1: Jane promises to pay Mary $1,000 if Mary repairs Jane's broken windshield. Mary comes to Jane's house the next day to repair Jane's windshield. Before Mary begins work on the windshield, Jane informs Mary she has changed her mind. Can Jane change her mind?

No (but would go to court to determine what is substantial amount of work)

Unilateral Contract Example 2: After Mary has spent 8 hours repairing the windshield and is nearly finished Jane asks Mary to stop work and refuses to pay Mary? Can Jane do this?

No (This is a void contract. Neither Jane nor Mary is obligated to perform under this contract)

Void Contract Example: A contract that does not have a Lawful Object is void. So, if Jane promises to pay Mary $10,000 if Mary promises to kill Jim and Mary promises to Kill Jim = Contract?

Agreement, Consideration, Lawful Object, Contractual Capacity

What are the 4 elements needed to have a valid contract?

Whenever there is a dispute concerning the enforceability of the contract, the courts strive to honor the contract the parties intended to enter into so that the court can give effect to the private law of the parties.

What do courts hope to accomplish when there is a dispute involving a contract?

-The court can supply a missing term if a reasonable term can be implied (Terms supplied in this way are called implied terms; Time of performance and price can be implied; Parties and subject matter usually are not implied)

What happens if a term is missing from an offer?

If the contract can't be performed, you are not obligated.

What if it is a bilateral contract and the parties exchange promises before the subject matter is destroyed but destruction of the subject matter occurs before the subject matter is delivered?

Breach of Contract

What occurs when offeror or offeree fails to fulfill her end of the bargain?

Acceptance

What the offeree does to show her agreement to the terms of the offer. The acceptance must be done in the manner invited or required by the offer.

anytime before the offeree has begun performance (Revoking after the performance has performance has begun will result a breach of contract.)

When can an offer to create a unilateral contract be lawfully revoked (cancelled)?

Offeror (promisor) Offeree (promisee)

Who are the parties to a contract?

The offeree (or authorized person) can accept the offer

Who can accept the offer?

Just because you're legally an adult doesn't mean you're automatically smarter

Why do minors have a reasonable time after becoming adults to disaffirm?

Law now technically views you as an adult who can think for yourself

Why must disaffirmance be done by age of majority?

-Law doesn't view minor as someone with all the knowledge of an adult

Why must ratification occur during age of majority otherwise the contract is not enforceable against minor?

Ambiguous Terms

Will be interpreted against the person who drafted them.

Jane because one of the elements, consideration is missing

Without asking Jane, Mary repairs Jane's broken windshield. If Jane pays Mary but thereafter sues Mary to get her money back, who wins? Why?

Mutual assent

____________ ___________ exists when there is a "meeting of the minds" (i.e. a common understanding) about the terms, conditions, and subject matter of the offer and acceptance; in other words, offeror and offeree are bargaining over (or talking about) the same thing.

Contractual Capacity

the ability of a person to enter into a binding contract

Lawful and Sufficient

the consideration is not illegal and that each party is giving up something of value

Offeror (promisor)

the party who makes an offer to enter into a contract; establishes the terms of the contract

Definite Terms

the terms of an offer must be clear enough to enable the offeree to decide whether to accept or reject the offer

Completed gift promises are not revocable

while a person who promises a gift is under no obligation to complete (actually give the gift), if the gift is completed the recipient is under no obligation to return it