Upload
lester-mathews
View
215
Download
0
Tags:
Embed Size (px)
Citation preview
10-2
3•Introduction to Contracts
•The Agreement: Offer•The Agreement: Acceptance
•Consideration•Reality of Consent
Contracts
PART
10-3
3•Capacity to Contract
•Illegality•Writing
•Rights of Third Parties•Performance and Remedies
Contracts
PART
10-4
The Agreement: Offer
PA ET RHC 10
There is nothing more likely to start disagreement among people or countries than an agreement.
E.B. White
10-5
Learning Objectives
• Explain the elements of an offer under both the UCC and common law
• Distinguish advertisements from mere invitations to negotiate
• Describe circumstances for termination of an offer
10-6
• An offer is a promise conditional on an act, return promise, or forbearance (refraining from doing something)
• Parties to a contract must have intent to enter binding agreement, terms must be definite, and the offer must be communicated to the offeree by the offeror
Requirements for an Offer
10-7
• An offeror must indicate present intent to contract, or the intent to meet the contract obligation upon acceptance
• Courts use the objective theory of contracts:– Would a reasonable person judge the
offeror’s words and acts in the context of the circumstances to signify intent?
– See Meram v. MacDonald
Intent
10-8
• Offer and resulting contract must be definite and certain– Offer cannot be vague about major points
• Example: – “I’ll paint your house until I’m tired” is
vague, but “I’ll finish painting your house in three days” is definite
– See Armstrong v. Rohm and Haas Company, Inc.
Definiteness of Terms
10-9
• UCC often creates contractual liability where no contract would result under common law
• Article 2 sales contracts can be created “in any manner sufficient to show agreement, including conduct…” [2–204(1)]
• A price, quantity, delivery, and time for payment term left open in a contract can be filled by inserting a presumption found in the Code’s rules
Definiteness Under the UCC
10-10
• Advertisements for a sale of goods at specified prices generally are not considered offers, but are invitations to offer or negotiate– Examples: flyers, handbills, catalogs listing
prices, “for sale” ads in newspaper or yard– Sales puffery is not an offer
Advertisements
10-11
• Advertisements offering rewards for lost property, information, or capture of criminals are treated as offers for unilateral contracts– To accept the offer and receive the
reward, an offeree must perform the requested act (such as returning a lost dog to its owner)
Rewards
10-12
• Advertisements for bids and sellers at auctions generally are treated as making an invitation to offer, so those who bid are making an offer that seller may accept or reject
• Gleason v. Freeman: online real estate auction is not a binding contract, but a non-binding advertisement
Auctions and Bids
10-13
Termination by Revocation
• An offer may be terminated by revocation if revoked & communicated to offeree before the offer is accepted
• Exceptions:– Option contract in which an offeror agrees
not to revoke the offer for a stated time in exchange for some valuable consideration
– Offers for unilateral contracts (e.g., rewards)
– Promissory estoppel circumstances– Firm offers for sale of goods
10-14
Other Methods of Termination
• Rejection: Offeree expressly rejects (unwilling to accept) offer or impliedly rejects the offer by making a counteroffer – An offer to contract on terms
materially different from terms of the original offer
• Lapse of time and expiration of offer• Death or disability of either party• Destruction of subject matter• Subsequent illegality