Contract Law

Contract Law

Law of Contracts
Exam #2 Study Guide
Chapter 3-4
October 12, 2011

Chapter 3:
Offer- Key Terms:
Offer- a proposal made with the purpose of obtaining an acceptance; creating a contract
Offeror- the person making the offer
Offeree- the person to whom the offer is made
Reasonable person test- where an ordinary person would understand the terms to be.
Preliminary negotiation- parties who commence the contracting process. A form of solicitation.
Output contract- where the offeror agrees to sell all its product to one buyer
Requirements contract- where offeree agrees to purchase all required supply from offeror
Breach- failure of a party to perform contract obligations
-A proposal is not an offer

Elements of an Offer:
Offeror must have objective intent
Offer terms must be definite and identify
Parties
Price
Subject matter
Time of performance
Offeror must communicate offer
Offeree must know of the offer

An offer should include the following:
1) Parties
The persons being bound to a contract should be identified
A contract can be directed to a group of people, or the public
2) Price
The specific price the parties intend to pay for the subject matter is important.
Under common law of contracts, it does not permit the price to be negotiated at a later date.
3) Subject matter of the contract
Cannot be subject to question
Statutes may dictate how definite the subject matter of the offer must be
4) Time of performance
Offers are no open indefinitely
When a time period is not specified, a “reasonable time” period will be inferred.

Acceptance- Key Terms:
Acceptance- the assent by the person to whom an offer is made. It is the intent to be bound to the terms set out in the offer
Clickwrap agreement- internet contracts that requires you to click ‘accept’
Option Contract- when an offeree pays the offeror money to keep the contract open. (Irrevocable offer) you pay for the right to hold the offer
Statutes of limitations- the time...