Business Law Chapter 12

Mailbox rule

acceptance is effective when offeree places the acceptance in the mailbox (default rule)

Unilateral contract

acceptance is evident, notification not necessary

Death or incompetence of the offeror or offeree

automatically terminates unless it is an irrevocable offer.

Termination by action of parties

Acceptance. Revocation of the offer by the offeror. Rejection of the offer by the offeree. Counteroffer by the offeree

Communication of Acceptance

Bilateral contract, and unilateral contract

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.

Special offer situations

advertisements: offers (invitations to negotiate)

Termination of offer

an offer may be terminated prior to acceptance by either: auction of the parties or by operation of law

E-signature technologies

any electronic means of agreeing to an electronic contract is valid if it clearly indicates "intent to be bound" "X" or "Check mark" or initials. Digitized signatures valid. Typing your name is valid. E-signatures and e-documents are valid under federal law unless the parties both specifically agree otherwise. There are exceptions.

Mirror image rule

at common law, any change in terms automatically terminates the offer and substitutes the counteroffer

Bilateral contract

communication of acceptance is necessary because of mutual exchange of promises

Offeror's serious intention

contract is judged by what a reasonable person in the Offeree's position would conclude about the offer (under the objective theory of contracts)

Where intent may be lacking

expressions of opinion: not offers. Statements made in jest, frustration or anger. Statements of future intent: not offers. Preliminary negotiations, or invitations to Negotiate: not offers

Agreement in E-Contracts

full contract should be available to both parties (at least hyperlink). Terms of acceptance should be clear (forum selection clause, choice of law clause, click on agreements, I accept of I agree)

Mode and timeliness

general rule, mailbox rule, substitute method of acceptance

Silence as acceptance

general rule: offeree should not be legally obligated to affirmatively reject an offer

Definiteness of terms

identification of the parties. Object of subject matter of the contract. Consideration to be paid. Time of payment, delivery, or performance. **A court can supply missing terms if the parties intend to form a contract**

Destruction of the subject matter

if it occurs before acceptance of the offer, then the offer is canceled

Substitute method of acceptance

if the offer calls for a specific way to acceptance that should be the only way you accept. Use an alternative way at your own risk

General rule

in bilateral contracts, acceptance is timely if made before offer is terminated

Supervening illegality of the proposed contract

legislation or court decision automatically terminates offer or renders contract unenforceable

Auctions

not an offer, but invitation for offers through an auctioneer,

Agreement

offer and acceptance, parties are the offeror and the offeree, they must show mutual assent to terms of contract and once an agreement is reached, a valid contract is formed

Revocation of the offer by the offeror

offer can be withdrawn anytime before offeree accepts the offer. Effective when the offeree or offeree's agent receives it

Lapse of time

offer terminates by law when the period of time specified in the offer has passed. If no time period for acceptance is specified, the offer terminates at the end of a reasonable period of time.

Requirements of the offer

offeror's serious intention, definiteness of terms, communication to offeree

Rejection of the offer by the offeree

rejection by the offeree (expressed or implied) terminates the offer. Effective only when it is received by the offeror or the offeror's agent

Counteroffer by the offeree

rejection of original offer and the simultaneous making of a new offer. Mirror image rule.

Unequivocal acceptance

the mirror image rule

Acceptance

the voluntary act (expressed or implied) by the offeree that, shows the assent (agreement), to the terms of an offer