Contracts agreement ppt business law

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Contracts agreement ppt business law

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Contracts agreement ppt business law

  1. 1. 1 Contracts: Agreement
  2. 2. 2 Introduction  Agreement = offer and acceptance.  Parties must show mutual assent to terms of contract.  Once an agreement is reached, if the other elements of a contract are present, a valid contract is formed.
  3. 3. 3 §1: Requirements of the Offer  Offeror’s serious intention.  Definiteness of terms.  Communication to Offeree.
  4. 4. 4 Offeror’s Serious Intention  Contract is judged by what a reasonable person in the Offeree’s position would conclude about the offer.  Case 10.1: Lucy v. Zehmer (1954).  Offers made in anger, jest, or undue excitement are usually not offers.  Expressions of opinion are not offers.  Statements of Intention or preliminary negotiations are are not offers.  Advertisements, Catalogues, Price Lists, and Circular are treated as Invitations to negotiate and
  5. 5. 5 Offer-Definiteness of Terms  Terms (Expressed or Implied).  Identification of the parties.  Object or subject matter of the contract.  Consideration to be paid.  Time of payment, Delivery, or Performance.  Case 10.2: Satellite Entertainment Center v. Keaton (1997).
  6. 6. 6 Offer-Communication Offeree’s knowledge of the offer:  Directly by the Offeror.  Use of Agents.
  7. 7. 7 §2: Termination of the Offer  An offer may be terminated prior to acceptance by either:  Action of the Parties; or by  Operation of Law.
  8. 8. 8 Termination by Action of the Parties [1]  Revocation of the offer by the Offeror:  Offer can be withdrawn anytime before Offeree accepts the offer.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 receive it.  Exceptions:  Irrevocable Offers.  Option Contract: Promise to hold an offer open for a specified period of time in return of consideration.
  9. 9. 9  Exceptions (Cont’d):  Detrimental Reliance or Promissory Estoppel where Offeree relies on offer to his or her detriment, thus Offeror is barred from revoking the offer.  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 Offeror’s agent. Termination by Action of the Parties [2]
  10. 10. 10 Termination by Action of the Parties [3]  Rejection by Offeree (Cont’d).  A counteroffer by the Offeree is a rejection of the original offer and making of a new offer.  Mirror Image Rule.  Offeree’s acceptance to match the the Offeror’s offer exactly.
  11. 11. 11 Termination by Operation of Law  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.  Destruction of the Subject Matter.
  12. 12. 12 Termination by Operation of Law [2]  Death or Incompetence of the Offeror or Offeree.  Supervening Illegality of the Proposed Contract.
  13. 13. 13 §3: Acceptance  Acceptance is the  Voluntary act (expressed or implied),  by the Offeree that,  shows assent (agreement),  to the terms of an offer.  “Mirror Image” Rule.
  14. 14. 14 Silence as Acceptance  Acceptance of Services by Silence.  Sometimes Offeree has a duty to speak.  Prior Dealings and Acceptance.  Silence can be acceptance if there are prior dealings.  Solicited Offers.  Offeree has a duty to reject.
  15. 15. 15 Mode and Timeliness of Acceptance  Mail Box Rule - Acceptance becomes effective on dispatch, providing that authorized means of communication is used. Offeree accepts by using the stipulated means of acceptance.  Offeror specifies (expressly or impliedly) how acceptance should be made.  Effective when dispatched (mailed, shipped).
  16. 16. 16 Means of Acceptance  Exceptions:  If acceptance is not properly dispatched by the Offeree.  If Offeror specifies that acceptance will not be effective until it is received.  If acceptance is sent after rejection, whichever is received first is given effect.  Unauthorized Means of Acceptance.  Not effective until it is received by the Offeror. If timely sent and dispatched it is considered to have been effective on its dispatch.  Case 10.3: Osprey LLC v. Kelly-Moore Paint Company (1999).
  17. 17. 17 § 4: Technology and Acceptance  Traditional rules provide framework for digital age.  But traditional rules may not apply to acceptances via Fed Ex, email, or fax.  Generally, ‘mailbox rule’ does not apply to online offers.

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