Contract Law: Acceptance and Consideration

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Questions and Answers

What is the essence of the Mirror Image Rule in contract law?

Acceptance can differ from the offer as long as it is reasonable.

Any acceptance must include additional terms.

Only written acceptance is valid.

Acceptance must exactly match the terms of the offer. (correct)

Under the UCC Section 2-207, what happens when terms of the acceptance differ from the original offer?

The original offer is canceled.

The differences may still lead to a binding contract unless objected. (correct)

The acceptance is invalid and no contract is formed.

New terms must be negotiated separately.

What is the Mailbox Rule concerning acceptance of an offer?

Acceptance is effective upon dispatch if authorized by the offeror. (correct)

Acceptance is effective if it is sent in an unauthorized manner.

Acceptance must be made in writing to be valid.

Acceptance is effective only upon receipt by the offeror.

In what circumstance might acceptance by silence be considered valid?

When the offeree has prior dealings implying acceptance by silence. Signup and view all the answers

What constitutes consideration in a contract?

A promise or act provided by each party creating a bargained-for exchange. Signup and view all the answers

Under what condition might courts question the adequacy of consideration?

If there is evidence of duress or fraud. Signup and view all the answers

Which of the following can be considered valid consideration in a contract?

Giving up the right to sue. Signup and view all the answers

What is a common result of deviations in acceptance under the Mirror Image Rule?

It results in a counteroffer. Signup and view all the answers

What are the three conditions that must be met for promissory estoppel to be enforced?

A promise is made, reasonable expectation of reliance, and actual reliance occurs. Signup and view all the answers

Which of the following best describes an illusory promise?

A promise dependent on discretion without binding the promisor. Signup and view all the answers

What is a valid consequence of a contract entered into under duress?

The contract can be voided due to improper threats. Signup and view all the answers

In contract law, what is considered a unilateral mistake?

A mistake by one party that the other was unaware of. Signup and view all the answers

Under what circumstances can minors enter into enforceable contracts?

If the contract is for necessities. Signup and view all the answers

Which of the following accurately describes fraud in the context of contract enforceability?

Intentional deceit used to induce agreement to a contract. Signup and view all the answers

What category of individuals lacks the capacity to contract due to their mental state?

Individuals who are intoxicated or under the influence. Signup and view all the answers

What is the primary result of a mutual mistake in a contract?

The contract can be voided if both parties agree. Signup and view all the answers

Study Notes

Acceptance and Offer

Acceptance: Agreement to offer terms, in required manner.
Mirror Image Rule: Acceptance must exactly match offer (common law).
UCC Section 2-207: Allows varied terms in merchant contracts, unless material alterations or objections.
Manner of Acceptance: Offeror dictates, or reasonable under UCC if not specified.
Mailbox Rule: Acceptance effective upon dispatch (authorised).
Acceptance by Silence: Usually not valid, unless prior dealings suggest, or offeree benefits from the offeror's performance.

Consideration

Consideration: Mutually exchange of something of legal value.
Gross Inadequacy: Courts generally don't question sufficiency unless signs of duress or fraud exist.
Notion of Consideration: Essential for contract enforceability - each party offers something valuable (promise, act, forbearance).
Examples of Consideration: Exchanging promises, giving something tangible, forgoing a legal right.
Courts generally uphold contracts: if consideration is legal, even if unequal.

Exceptions to Consideration

Promissory Estoppel: Enforceable promise without consideration if:
- Promisor makes a promise.
- Promisor expects reliance.
- Actual reliance and injustice result from lack of enforcement.
Illusory Promise: Unenforceable promise not binding on promisor. (e.g., "If I feel like it").

Defenses to Contract Enforceability

Duress: Invalidates contracts formed under improper threats.
Undue Influence: Contracts voided if made due to unfair persuasion based on trust relationship.
Mistake: Unilateral and especially mutual mistakes in contracts can affect validity.
Fraud: Intentional misrepresentation voids the contract if justified reliance occurred.

Capacity to Contract

Minors: Generally cannot be bound to contracts (often voidable to protect minors), due to lack of experience/maturity.
Mentally Incompetent Individuals: Contracts are void if lacking mental capacity to understand obligations.
Intoxicated individuals: Contracts entered into while visibly intoxicated are not enforceable.

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Description

This quiz covers essential concepts in contract law, focusing on acceptance and consideration. Learn about the Mirror Image Rule, UCC Section 2-207, and the significance of consideration in enforcing contracts. Test your understanding of these critical legal principles.