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25-1
Chapter 10Agreement
Introduction
Contracts are voluntary agreements between the parties
One party makes an offer that is accepted by the other party
Without mutual assent, there is no contract
10-2Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Agreement
Agreement: Manifestation by two or more persons of the substance of a contract Requires mutual assent to perform current or
future contractual duties
10-3Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Case 10.1: Contract
Case The Facebook, Inc. v. Winklevoss Web 2011 U.S. App. Lexis 7430 (2011) United States Court of Appeals for the Ninth Circuit
Issue Is the settlement agreement enforceable?
10-4Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Offer
Offer: The manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it
Offeror: The party who makes an offer Offeree: The party to whom an offer has been made
10-5Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Offer
Requirements for an effective offer The offeror must objectively intend to be bound by
the offer The terms of the offer must be definite or
reasonably certain The offer must be communicated to the offeree
10-6Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Offer
Objective theory of contracts
Intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties
Express Terms
The terms of an offer must be clear enough to the offeree to be able to decide whether to accept or reject the terms of the offer
Terms must be definite
10-7Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Offer
An offer must contain the following terms Identification of the parties Identification of the subject matter and quantity Consideration to be paid Time of performance
10-8Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Offer
Implied Terms The court can supply a missing term if a
reasonable term can be implied Terms supplied in this way called implied terms
10-9Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Case 10.2: Contract
Case Marder v. Lopez 450 F.3d 445, Web 2006 U.S. App. Lexis 14330 (2006) United States Court of Appeals for the Ninth Circuit
Issue Is the general release Marder signed an
enforceable contract?
10-10Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Offer
AdvertisementsAdvertisements
RewardsRewards
AuctionsAuctions
Special Offers
10-11Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Termination of an Offer by Act of the Parties
Revocation: Withdrawal of an offer by the offeror that terminates the offer
Rejection: Express words or conduct by the offeree to reject an offer
Counteroffer: A response by an offeree that contains terms and conditions different from or in addition to those of the offer
10-12Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Termination of Offer by Operation of Law
Destruction of the subject matter Death or incompetency of offeror or offeree Supervening illegality Lapse of time
10-13Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Acceptance
Acceptance: 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 objective theory of contracts
10-14Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Acceptance
Unequivocal acceptance Clear and unambiguous acceptance Only one possible meaning must not contain conditions or exceptions
10-15Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Acceptance
Mirror Image Rule: for an acceptance to exist, the offeree must accept the terms as stated in the offer
Any attempt to accept the offer on different terms constitutes a counteroffer
10-16Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Acceptance
Silence as Acceptance Offeree indicates that silence means assent Offeree signed agreement indicating continuing
acceptance until further notification Prior dealings indicate that silence means assent
10-17Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Acceptance
Time of acceptance Mailbox rule: an acceptance is effective when it is
dispatched, even if it is lost in transmission Does not apply if an offeree first dispatches a
rejection and then sends an acceptance
10-18Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
Acceptance
Mode of acceptance Proper dispatch Authorized means of communication
Implied authorization Express authorization
10-19Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.
10-20Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.