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BSL212 Quiz 2 Study Guide

by: taylor Notetaker

BSL212 Quiz 2 Study Guide BSL212

Marketplace > University of Miami > General > BSL212 > BSL212 Quiz 2 Study Guide
taylor Notetaker
GPA 3.4
Intro to Business Law

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BSL212 Quiz 2 Study Guide
Intro to Business Law
Study Guide
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This 12 page Study Guide was uploaded by taylor Notetaker on Wednesday March 11, 2015. The Study Guide belongs to BSL212 at University of Miami taught by in Spring2015. Since its upload, it has received 108 views. For similar materials see Intro to Business Law in General at University of Miami.


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Date Created: 03/11/15
Chapter 10 parties must manifest by word or conduct that you agree to the contract offerorljofferee bilateral vs unilateral contracts 0 both parties exchange 0 exchange of a promise either for performing an act or for refraining from doing an act 0 usually show mutual assent by and 0 one party makes proposal by words or conduct to other party who agrees by word or conduct to the proposal there may be no de nite offer and acceptance or de nite acceptance of an offer 0 a contract still exists if both parties39 actions manifest indicate a recognition by each of them of the existence of a contract 0 law applies an standard and is concerned only with the assent agreement or intention of a party as it reasonably appears from his words or actions is not concerned with what a party may have actually thought or the meaning that he intended to convey even if his subjective understanding or intention differed from the meaning he objectively indicated by word or conduct 0 proposal by one party indicating a willingness to enter into a contract 0 requirements explanation to follow under OFFER 1 intent 2 de niteness 3 communication a de nite undertaking or proposal made by one person to another indicating a willingness to enter into a contract 0 person making the proposal 0 person to whom the proposal is made 0 when offer is received it confers on the offeree the power to create a contract by acceptance which is an expression of the offeree s willingness to comply with the terms of the offer 0 until the offeree exercises this power the outstanding offer creates neither rights nor liabilities essentials of an offer 0 an offer need not take any particular form to have legal effect to be effective it must 1 be to the offeree o the offeree must know about the offer in order to provide his part of the mutual assent required to form a contract cannot agree to something about which he has no knowledge Chapter 10 offeror must communicate the offer in an intended manner offeree cannot become aware of offer by chance must be intentional communication communication must also be made or authorized by the offeror an offer need not be stated or communicated by words conduct from which a reasonable person may infer a proposal in return for either an act or a promise amounts to an offer an offer may be made to the general public no person can accept such an offer however until and unless he knows that the offer exists 0 if a person without knowing of an advertised reward gives information leading to the return of an item he is not entitled to the award because he did not accept the contract since he did not know about the reward 2 manifest an to enter into a contract 0 O O to have legal effect an offer must manifest an intent to enter into a contract the intent of an offer is determined objectively from the words or conduct of the parties the meaning of either party39s manifestation is based on what a reasonable person in the other party39s position would not have believed when a person jokes in words or writing but is taken literally and without regard to context or surrounding circumstances could be construed as an offer no contractual intent exists on the part of the promisor and the promisee is or reasonably ought to be aware of that fact if however the intended joke is so real that the promisee as a reasonable person under all circumstances believes that the joke is in fact an offer and so believing accepts the objective standard applies and the parties have entered into a contract a promise made under obvious excitement or emotional strain is likewise not an offer it is important to distinguish language that constitutes an offer from that which merely solicits or invites offers 0 such proposals although made in earnest lack the intent to enter into a Chapter 10 contract and are therefore not deemed offers 0 as a result a purported acceptance does not bring about a contract but operates only as an offer 0 proposals that invite offers include if a communication creates in a reasonable mind of an offeree an expectation that his acceptance will conclude a contract then the communication is an offer if not then the communication is a preliminary negotiation generally not considered an offer more like invitation to make an offer if a a person who deals in goods of the kind involved in transaction or who employs a dealer or broker makes a widespread promise to sell to each person on their mailing list the number of acceptances and resulting contracts might conceivably exceed their ability to perform might refrain from making offers by only announcing that goods are for sale with descriptions and quoted prices aucUoneer does not make offers to sell the property being aucUonedheinv es offers to buy if bid is accepted indicated by the hammer in the Chapter 10 auctioneer39s hand a contract results bidder is free to withdraw bid at any time before acceptance just as auctioneer is free to withdraw from sale unless sale is advertised or announced to be auctioneer may not withdraw an article or lot put up for sale unless no bid is made within a reasonable time 3 be sufficiently and certain 0 terms of a contract all of which are usually contained in the offer must be clear enough to provide a court with a reasonable basis for determining the existence of a breach and for giving an appropriate remedy it39s a fundamental policy that contracts should be made by the parties not the courts remedies for a breach must in turn have their basis in the parties39 contract missing terms may be supplied by course of dealing usage of trade or inference uncertainty as to incidental matters seldom will be fatal as long as the parties intended to form a contract 0 the more terms the parties leave open less likely it is that they have intended to form a contract 0 given the large variety of contracts stating the terms that are essential to all contracts is impossible in most cases material terms include o the parties subject matter price quantity quality time of performance OOOOO open terms UCC provides standards with respect to agreements for the sale of goods by which Chapter 10 the courts may determine omitted terms provided the parties intended to enter into a binding contract the Code provides missing terms in a number of instances where for example the contract fails to specify the price the time or place of delivery or payment terms 0 an offer for the purchase or sale of goods may leave open particulars of performance to be speci ed by one of the parties 0 any such speci cation must be made in honesty in fact in the conduct or transaction concerned under 2001 Revised UCC Article 1 means honesty in fact and the observance of reasonable commercial standards of fair dea ng a standard determined in terms of the business judgment of reasonable persons familiar with the practices customary in the type of transaction involved and in terms of the facts and circumstances of the case 0 output and requirements contracts an agreement of a buyer to purchase a seller s entire output for a stated period an agreement of a seller to supply a buyer with all his requirements for certain goods even though the exact quantity of goods is not speci ed and the seller may have some degree of control over his output and the buyer over his requirements under the Code and the Restatement such agreements are enforceable by the application of an objective standard based on the good faith of both parties Chapter 10 0 thus a seller who operated a factory only 8 hoursday before agreement was made cannot operate factory 24 hoursday and insist buyer buy all of the output 0 nor can the buyer expand his business abnormally and insist that the seller still supply all of his requirements 0 if these essentials are present and the offer has not terminated the offer gives the offeree the power to form a contract by accepting the offer 0 duration of offers 0 an offer confers upon the offeree a power of acceptance which continues until the offer terminates 0 ways in which an offer may be terminated other than acceptance the offeror may specify the time within which the offer is to be accepted and may specify any other term or condition in the offer 0 unless otherwise terminated the offer remains open for the speci ed time 0 upon expiration of that time offer no longer exists and cannot be accepted 0 any acceptance of an expired offer will serve only as a new offer 0 if offer does not state time within which offeree may accept offer will terminate after a reasonable time o determining reasonable time is a question of fact depending on the nature of the nature of the contract proposed usages of business other circumstances of the case 0 ex whether the offer was communicated by electronic means 0 ex offer to sell a perishable good would be open for a far shorter period of time than an offer to sell undeveloped real estate the offeror generally may cancel or revoke an offer at any time prior to its acceptance 0 if the offeror originally promises the offer will be open for thirty days but wishes to terminate after ve days he may do so merely by giving the offeree notice that he is withdrawing the offer 0 this notice may be given by any means of communication and effectively Chapter 10 a few states however adopted rule treating revocations the same as acceptances making them effective upon dispatch 0 an offer made to the general public is revoked only by giving to the revocation publicity equivalent to that given offer notice of revocation may be communicated indirectly to offeree through reliable information from a third party person that the offeror has disposed of the property he has offered for sale or has otherwise placed himself in a position indicating an unwillingness or inability to perform the promise contained in the offer certain limitations restrict the offeror s power to revoke at any time prior to its acceptance 0 contract by which the offeror is bound to hold open an offer for a speci ed period of time must comply with all of the requirements of a contract including offeree39s giving of inducement to enter into a contract consisting of an act or promise that has legal value to the offeror o Code provides that a merchant is bound to keep an offer to buy or sell goods open for a stated period or if no time is stated for a reasonable time not exceeding three months if the merchant gives assurance in signed writing that the offer will be held open promise not to revoke an offer for a stated period of time 0 Code makes a merchant s rm offer enforceable even though no consideration is given the offeror for that promise ie an option contract does not exist 0 a person who 1 is a dealer in a given type of goods 2 by his occupation holds himself out as having knowledge or skill peculiar to the goods or practices involved 3 employs an agent or broker whom he holds out as having such knowledge or skill o certain offers such as bids made to the state municipality or other governmental body for the construction of a Chapter 10 building or some public work are made irrevocable by statute 0 where the offer contemplates a a promise for an act injustice to the offeree may result if revocation is permitted after the offeree has started to perform the act requested in the offer and has substantially but not completely accomplished it such an offer is not accepted and no contract is formed until the offeree has completed the requested act 0 the offeree does not bind himself to complete performance by starting the act so the offeror can still revoke offer at any time before the offeree completes performance the Restatement deals with this problem by providing that where the performance of the requested act necessarily requires offeree to expend time and effort the offeror is obligated not to revoke the offer for a reasonable time c this obligation arises when the offeree begins performance 0 however if offeror does not know of the offeree s performance and has no adequate means of learning of it within a reasonable time the offeree must exercise reasonable diligence to notify the offeror of the performance 0 a noncontractual promise may be enforced when it is made under circumstances that should lead the promisor reasonably to expect that the promise will induce the promise to take action in reliance on it has been used in some cases to prevent an offeror from revoking an offer prior to its acceptance a manifestation by the offeree of his unwillingness to accept offeree is not required to reject offer formally but may simply wait until the offer terminates by lapse of time a communicated rejection terminates the power of acceptance effective moment of rejection when received by the offeror receipt of rejection 0 afterwards offeree may no longer accept the offer Chapter 10 rejection may consist of express language or may be implied from language or conduct a counterproposal from the offeree to the offeror that indicates a willingness to contract but on terms or conditions different from those contained in the original offer 0 not an unequivocal acceptance of the original offer and by indicating an unwillingness to agree to the terms of the offer it generally operates as a rejection and operates as a new offer 0 another type of counteroffer that claims to accept the offer but expressly makes the acceptance contingent on the offeror39s assent to additional or different terms 0 on his death or incompetency offeror no longer has the legal capacity to enter into a contract 0 thus all outstanding offers are terminated same with offeree because an ordinary offer is not assignable transferable and may be accepted only by the person to whom it was made 0 no one else has power to accept the offer 0 does not terminate an offer contained in an option though if performance of a valid contract is subsequently made illegal the obligations of both parties under the contract are discharged illegality taking effect after making the offer but prior to acceptance has the same effect D offer is legally terminated acceptance of offer 0 acceptance of offer is essential to formation of a contract 0 once an effective acceptance has been given contract is formed 0 acceptance of an offer for a contract in which both parties exchange promises is some overt act by the offeree that manifests his assent to the terms of the offer such as speaking or sending a letter telegram or other explicit or implicit communication to the offeror o acceptance of an offer for a a promise for an act is the performance of the requested act with the intention of accepUng 0 communication of acceptance general rule because acceptance is the manifestation of the offeree39s assent to the offer it must necessarily be communicated to the offeror this is the rule as to all offers to enter into o in the case of notice of acceptance to the offeror usually is not required Chapter 10 0 however if offeree has reason to know that the offeror has no adequate means of learning of the offeree39s performance with reasonable promptness and certainty then the offeree must make reasonable efforts to notify the offeror of acceptance or lose the right to enforce the contract 0 an offeree is generally under no legal duty to reply to an offer 0 silence or inaction therefore does not indicate acceptance of the offer HOWEVER by custom usage or course of dealing the offeree39s silence or inaction may operate as an acceptance 0 thus silence or inaction of an offeree who fails to reply to an offer operates as an acceptance and causes a contract to be formed effective moment 0 an offer revocation rejection and a counteroffer are effective when they are received and an acceptance generally effective upon dispatch o UNLESS offer speci cally provides otherwise the offeree uses an unauthorized means of communication or the acceptance follows a prior rejection if offer speci cally stipulates the means of communication to be used by offeree acceptance must conform to that speci cation 0 the rule that an acceptance is effective when dispatched or sent does not apply where the offer provides that the acceptance must be received by the offeror o if offeror states that reply must be received by a certain date the effective moment of the acceptance is when offeror receives it not when offeree sends or dispatches it authorized means historically either the means the offeror expressly authorized in the offer or if none was authorized the means the offeror used in presenting the offer 0 the Restatement and the Code both now provide that where the language Chapter 10 in the offer or the circumstances do not otherwise indicate an offer to make a contract shall be construed as authorizing acceptance in any reasonable manner 0 thus an is usually any reasonable means of communication 0 these provisions are intended to allow exibility of response and the ability to keep pace with new modes of communication when the method of communication used by the offeree is unauthorized the traditional rule is that acceptance is effective when and if received by the offeror provided that it is received within the time during which the authorized means would have arrived 0 the Restatement goes further by providing that if these conditions are met then the effective time for the acceptance is the moment of dispatch not effective when sent by offeree but only when and if received by offeror before he receives the rejection 0 thus when acceptance follows a prior rejection the rst communication the offeror receives is the effective one o a late or defective acceptance does not create a contract after offer has expired it cannot be accepted however a late or defective acceptance does manifest a willingness on the part of the offeree to enter into a contract and therefore constitutes a new offer 0 in order to create a contract based on this offer the original offeror must accept the new offer by manifesting his assent to it one that contains terms different from or additional to those in the offer receives distinctly different treatment under the common law and under the Code 0 Common Law an acceptance must be positive and unequivocal Chapter 10 0 may not change add to subtract from or qualify in any way the provisions of the offer aka must be mirror image of the offer any communication by the offeree that attempts to modify the offer is not an acceptance but a counteroffer which does not create a contract 0 Code the common law mirror image rule is modi ed by the Code 0 this modi cation is necessitated by the realities of modern business practices 0 a vast number of business transactions use standardized business forms 0 under the common law39s mirror image rule no contract would exist for the seller has not accepted unequivocally all of the material terms of the buyer39s offer 0 the code attempts to alleviate this battle of the forms by focusing on the intent of the parties if offeree does not expressly make her acceptance conditional upon the offeror39s assent to the additional or different terms a contract is formed 0 the issue then becomes whether the offeree39s different or additional terms become part of the contract 0 if both offeror and offeree are merchants such additional terms may become part of the contract provided that they do not materially alter the agreement and are not objected to either in the offer itself or within a reasonable period of time


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