Business Law - Chapter 10

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agreement

the manifestation by two or more persons of the substance of a contract.

offeror

the party who makes an offer.

offeree

the party to whom an offer has been made.

offer

the maifestation 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.

objective theory of contracts

a theory that says the intent to contract is judged by the reasonable person standard and not by the subjective intent of the parties.

the terms of an offer

(1) identification of the parties;
(2) identifications of the subject matter and quantity;
(3) consideration to be paid;
(4) time of performance

express terms

most offers and contracts set forth express terms that identify the parties, the subject matter of the contract, the consideration to be paid by the parties, and the time of performance.

implied terms

a term in a contract that can reasonable by supplied bt the courts.

advertisement

an invitation to make an offer or an actual offer.

reward

an award given for perforamce of some service or attainment. To collect reward, the offeree must (1) have knowledge of the reward offer prior to completing the requested act and (2) perform the requested act.

Types of Auctions

Auction with reserve;
Auction without reserve

auction with reserve

an auction in which the seller retains the right to refuse the highest bid and withdraw the goods from sale. Unless expressly stated otherwise, an auction is an auction with reserve.

auction without reserve

an auction in which the seller expressly gives up his or her right to withdraw the goods from sale and must accept the highest bid.

Termination of an offer by Act of the Parties

(1) Revocation of an offer by the offeror;
(2) Rejection of an Offer by the offeree;
(3) Counteroffer by the offeree

Revocation

withdrawl of an offer by the offeror that terminates the offer.

rejection

express words or conduct by the offeree to reject an offer. Rejection terminates the offer.

Counteroffer

a resposne by an offeree that contains terms and conditions different from or in addition to those of the offer. A counteroffer terminates the previous offer.

Termination of an Offer by Operation of Law

(1) Destruction of the Subject Matter;
(2) death or incompetency of the offeror or offeree;
(3) Supervening Illegality;
(4) Lapse of Time;

Supervening Illegality

the enactment of a statute, regulations, or court decision that makes the object of an offer illegal. this action terminates the offer.

lapse of time

a stated time period after which an offer terminates. if no time is stated, an offer terminates after a reasonable time.

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 contacts.

Rules of Acceptance

(1) Unequivoacal Acceptance;
(2) Miror Image Rule;
(3) Acceptance-Upon-Dispatch Rule (mailbox rule);
(4) Proper Dispatch Rule;
(5) Authorized means of communication

unequivocal acceptance

that is, the acceptance must be clear and unambiguous, and it must have only one possible meaning.

mirror image rule

a rule which states that for an acceptance to exist, the offeree must accept the terms as stated in the offer.

acceptance-upon-dispatch rule (mailbox rule)

a rule which state that an acceptance is effective when it is dispacted, even if it is lost in transmision

Effective Dates of Communications

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proper dispatch

the proper addressing, packaging, and posting of an acceptance.

implied authorization

a mode of acceptance that is implied from what is customary in similar transactions, usage fo trade, or prior dealings between the parties.

express authorization

a stipulation in an offer that says the acceptance must be by specified means of communication.

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