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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

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Agreement

Agreement: Manifestation by two or more persons of the substance of a contract Requires mutual assent to perform current or

future contractual duties

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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?

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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

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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

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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

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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

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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

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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?

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Offer

AdvertisementsAdvertisements

RewardsRewards

AuctionsAuctions

Special Offers

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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

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Termination of Offer by Operation of Law

Destruction of the subject matter Death or incompetency of offeror or offeree Supervening illegality Lapse of time

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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

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Acceptance

Unequivocal acceptance Clear and unambiguous acceptance Only one possible meaning must not contain conditions or exceptions

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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

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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

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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

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Acceptance

Mode of acceptance Proper dispatch Authorized means of communication

Implied authorization Express authorization

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