Intro to Business Chapter 14

Under common law, what are the necessary elements of a valid contractual acceptance?

1) the intent to be bound by an acceptance 2) definite and certain terms, and 3) communication of the offeree

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

False

If an offer states that it is good for 30 days, what happens in thirty days if the offeree has not responded?

The offer terminates immediately

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

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

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

can occur through any reasonable means

_________ as an element of a contract refers to what each party gets in exchange for his or her promise under the contract

consideration

A ___________ is defined as a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty

contract

Jason agreed to buy Sara's car for $10,000. However, Sarah tells Jason that she will only sell her car for $12,000. In this scenario, Sara makes an

counteroffer

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

counteroffer

An _________ is best described as a contract that arises not from words but from the conduct of the parties?

implied

The means by which the offeree communicates acceptance to an offer may either be expressed stated or _________

implied

The means by which the offeree communicates acceptance to an offer may either be expressly stated or _________

implied

The first element of the offer is _______

intent

The offeror must show _______ to be bound by the offeree's acceptance

intent

Under the mailbox rule, acceptance is valid when

it is mailed by the offeree

Joe was the head chef and owner of Corner Grill in Columbus. He had three employees. One of them, Joan, fell sick on Sunday. Joe, thus, called Ashton, another of the employees to cover for Joan on Monday. Ashton did not answer, and Joe left a message on Ashton's answering machine asking Ashton to come into work the next day. Ashton never called back. Joe assumed Ashton's not calling back was Ashton's agreement to come into work. But Ashton never showed up the next day, and Joe's Corner Grill had to close for the day due to a shortage of workers. Joe sought damages for the business revenue he had lost that day by accusing Ashton of having breached his contract to fill in for Joan. However, the court ruled in favor of Ashton, finding that Ashton had never agreed verbally or in written form that he would cover Joan's work shift. But what if the facts of the case were different? Select each set of facts below that could change the outcome of the case. In the hiring process, Ashton was made aware that when Joe called an employee to assign a work shift, Joe would assume the shift would be covered, unless the employee called back. Ashton agreed to these terms. At least 50 times before this incident, Joe had left Ashton a message regarding Ashton's need to cover a shift. Ashton would routinely not call back, yet show up to cover the shift. Joe called Ashton several times, and tells Ashton that he will receive a bonus pay of $50 dollars if he comes in the next day to cover for Joan. Joe calls Ashton on Saturday several times, and leaves Ashton three messages asking Ashton to come in on Monday to cover for Joan. Joe says that he will direct deposit $100 dollars into Ashton's account on Sunday. Ashton listens to all three messages, but does not call back. He then spends the $100 deposited into his account on new shoes.

-In the hiring process, Ashton was made aware that when Joe called an employee to assign a work shift, Joe would assume the shift would be covered, unless the employee called back. Ashton agreed to these terms. -At least 50 times before this incident, Joe had left Ashton a message regarding Ashton's need to cover a shift. Ashton would routinely not call back, yet show up to cover the shift. -Joe calls Ashton on Saturday several times, and leaves Ashton three messages asking Ashton to come in on Monday to cover for Joan. Joe says that he will direct deposit $100 dollars into Ashton's account on Sunday. Ashton listens to all three messages, but does not call back. He then spends the $100 deposited into his account on new shoes.

The elements of an offer are

1) serious intent by the offeror to be bound to an agreement, 2) reasonable definite terms, 3) communication to the offeree

What are the methods by which termination of a contractual offer can occur?

1) revocation of the offeror 2) rejection or counteroffer by the offeree 3) destruction or subsequent illegality of the subject matter of the offer 4) death or incapacity of the offeror 5) lapse of time or failure of other conditions stated in the offer

The agreement process is on what page

327 Exhibit 14-1

Which one of the following is considered to be a legally binding offer? Advertisements Auctions without reserve Interest in an exchange Auction with reserve Invitation to negotiate

Auctions without reserve

If the offer does not make it clear how the offeree should respond, in what way can the offeree respond under the contract?

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

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

Counteroffer

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

A court may prevent the offeror from revoking his offer under when which of the following occurs? Counter offer Illegality Lapse of Time Rejection Detrimental reliance

Detrimental reliance

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

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?

In person, telephone, or email

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 the status of the offer?

It is immediately terminated

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 the 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

What are the names of the parties that form a contract?

Offeror and Offeree

What conditions would legally cause an offer to be immediately terminated?

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

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

Only the offeree or his or her agent

________________________ course of dealings between the parties could establish a pattern of behavior whereby it is reasonable to assume that the offeree's silence constitutes acceptance

Previous

_________, as a general rule, cannot be used to form a contract

Silence

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 the 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

Which of the following was the result in Alexander v. Lafayette Crime Stoppers Inc., the case in the text in which the plaintiffs sued for collection of reward money offered to catch a serial killer by the defending publications, and the publications defended on the basis that the plaintiffs failed to provide notice as required by the reward offers because the plaintiffs provided relevant information to law enforcement, not the defendants?

The defendant did not receive acceptance of the reward offer and that, therefore, no contract was formed

Which of the following conditions would terminate an offer, even if the offeree does not know of the terminating event?

When the offeror loses the legal capacity to enter into a contract

Using the objective standard to establish contractual intent, courts are concerned with looking at which of the following?

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

Parties to a contract can ____________________ that silence will constitute a valid acceptance by the offeree

agree

A counteroffer occurs when ___________

an offer is made by an offeree to his or her offeror relating to the same matter as the original offer made by the offeror

Which of the following can be considered an offer?

auction without reserve

In a(n)_________________ contract, the offeror makes a promise in return for a promise from the offeree

bilateral contract

If full benefits under a contract are bestowed upon an offeree and the failed to communicate an acceptance, an implied-in-________ contract is created

fact

To prove that a contract is implied, or implied-in-fact, it is necessary for a plaintiff to establish that a defendant

had an opportunity to reject the property or service received but did not

An agreement is made up of what

offer and acceptance

Formation of the agreement begins when the party initiating the contract, called the offeror, makes an offer to another party called__________

offeree

An _____________ has the power to control the means by which the acceptance is communicated

offeror

In an __________________ contract, the offeree gives consideration in return for the offeror holding the offer open and not revoking the offer for a specified period of time

option

Lucy v Zehmer

page 327

Lefkowitz v. Great Minneapolis Surplus

page 329

In general, there are two ways an offeree can manifest intent to enter into a contract by __________ and by returning a _____________________

performance ; promise

In order for a court to recognize promissory estoppel, the offeree must have _________ relied on the promise of the offeror and take action that has now caused some form of harm

reasonably

Once the offeree _______ an offer, the offer is legally terminated, even if the offer was stated to be open for a period of time

rejects

As a general rule, ____________ of an offer is effective when the offeree receives it

revocation

Tracy offers Liam a job as a store manager of a liquor store, which she plans to open in a small property owned by her husband. The property is located near a school. Before Liam accepts the offer, the state passes a rule that liquor stores cannot be located within a 5 mile radius of a school. In this scenario, the employment offer terminates due to

subsequent illegality of the subject matter