Podcast
Questions and Answers
A store advertises a specific television model at a deeply discounted price, including the model number, screen size, and resolution in the advertisement. According to the principles established in Lefkowitz, under which circumstance would this advertisement most likely be considered a valid offer?
A store advertises a specific television model at a deeply discounted price, including the model number, screen size, and resolution in the advertisement. According to the principles established in Lefkowitz, under which circumstance would this advertisement most likely be considered a valid offer?
- The advertisement includes the phrase 'Limited Quantities Available' printed in a small font at the bottom.
- The advertisement lacks any specific qualifiers and is distributed widely in the local newspaper.
- The advertisement indicates that the store reserves the right to limit quantities to one per customer.
- The advertisement states the offer is 'first-come, first-served' and clearly indicates the limited number of televisions available at the advertised price. (correct)
Smith offers to sell Jones his car for $5,000, and Jones responds, 'I accept, but only if you include the snow tires.' Under the Mirror Image Rule, what is the status of Smith's offer?
Smith offers to sell Jones his car for $5,000, and Jones responds, 'I accept, but only if you include the snow tires.' Under the Mirror Image Rule, what is the status of Smith's offer?
- Jones's response is a counteroffer, terminating Smith's original offer. (correct)
- Jones's response is a valid acceptance, and Smith must include the snow tires or breach the contract.
- Jones's response constitutes a rejection of Smith's offer.
- Jones has made a valid acceptance, creating a binding contract for the car including the snow tires.
Which scenario illustrates a situation where a court would most likely apply the doctrine of promissory estoppel?
Which scenario illustrates a situation where a court would most likely apply the doctrine of promissory estoppel?
- A homeowner promises to pay a contractor a bonus for completing a renovation project on time, but the promise is made after the project is finished.
- A friend promises to loan another friend money but later changes their mind.
- An employer makes an oral promise of a year-end bonus to an employee, who then uses this expected bonus to make a down payment on a house. (correct)
- A parent promises to give their child \$100 but never follows through.
Which of the following scenarios illustrates a situation involving 'past consideration' that would not be enforceable in a contract?
Which of the following scenarios illustrates a situation involving 'past consideration' that would not be enforceable in a contract?
A local business owner, Zehmer, jokingly agrees to sell his farm to Lucy while both are having drinks. Zehmer later refuses to go through with the sale, claiming he was not serious. Based on Lucy v. Zehmer, how would a court most likely rule in this situation?
A local business owner, Zehmer, jokingly agrees to sell his farm to Lucy while both are having drinks. Zehmer later refuses to go through with the sale, claiming he was not serious. Based on Lucy v. Zehmer, how would a court most likely rule in this situation?
Which scenario best exemplifies a bilateral contract?
Which scenario best exemplifies a bilateral contract?
In the case of Lucy v. Zehmer, what principle did the court emphasize regarding contractual intent?
In the case of Lucy v. Zehmer, what principle did the court emphasize regarding contractual intent?
What distinguishes an implied-in-fact contract from an express contract?
What distinguishes an implied-in-fact contract from an express contract?
Which of the following is an essential element required for a valid offer to exist?
Which of the following is an essential element required for a valid offer to exist?
Under what circumstance is silence considered a valid form of acceptance?
Under what circumstance is silence considered a valid form of acceptance?
A contract is considered 'executory' when:
A contract is considered 'executory' when:
What is the primary purpose of the 'objective test' in contract law?
What is the primary purpose of the 'objective test' in contract law?
Which of the following scenarios would likely be considered an unenforceable contract?
Which of the following scenarios would likely be considered an unenforceable contract?
Flashcards
Mirror Image Rule
Mirror Image Rule
Acceptance of an offer must match the offer's terms exactly.
Consideration
Consideration
Something of value exchanged between parties, showing intent to be bound by a contract.
Illusory Promise
Illusory Promise
A promise with no real obligation, making the contract unenforceable.
Pre-Existing Duty Rule
Pre-Existing Duty Rule
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Promissory Estoppel
Promissory Estoppel
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What is a contract?
What is a contract?
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Objective Test
Objective Test
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Offer
Offer
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Acceptance
Acceptance
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Mutual Assent
Mutual Assent
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Bilateral Contract
Bilateral Contract
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Mailbox Rule
Mailbox Rule
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Study Notes
- A contract is a legally enforceable agreement between parties involving an exchange of value.
Objective Test
- Courts apply a "reasonable person standard" to assess the validity of an agreement.
- Lucy v. Zehmer illustrates that intent is determined by outward expressions, not hidden intentions.
Contract Components
- Offer: The initial communication from the offeror.
- Acceptance: The offeree's agreement to the offer's terms.
- Consideration: The value that each party exchanges.
- Mutual Assent: Agreement on the contract's terms by all parties.
- Capacity: The legal competence of the parties to enter into a contract.
- Legality: The contract's subject matter must be legal.
- Writing/Legal Form: Some contracts require written form to be enforceable, as per the Statute of Frauds.
Contract Classifications
- Bilateral contracts entail a promise for a promise.
- Unilateral contracts involve a promise for performance, with the offer being revocable until the performance begins.
- Express contracts have clearly stated agreements.
- Implied-in-Fact contracts are inferred from conduct or behavior.
- Implied-in-Law contracts, or quasi-contracts, are imposed to prevent unjust enrichment, such as in Slick v. Reinecker.
- Executory contracts are ongoing.
- Executed contracts are fully performed.
- Formal contracts require specific legal formalities.
- Informal contracts encompass most modern agreements, be they oral, written, or implied.
- Valid contracts are legally binding.
- Void contracts have no legal existence.
- Voidable contracts can be canceled by one party.
- Unenforceable contracts cannot be enforced due to legal restrictions.
Preliminary Negotiations vs. Offer
- Preliminary negotiations are expressions of willingness to discuss a contract, but are non-binding.
- An offer is a definite proposal that is open for acceptance.
Offer Elements
- Intent to form a contract must be demonstrated.
- Lucy v. Zehmer establishes that an objective standard is used to determine intent.
- Certainty and Definiteness: An offer must include the price, subject matter, involved parties, and time of performance.
- Common Law dictates that offers must be definite.
- UCC allows for missing terms if intent is clear.
- Communication to Offeree: An offeree can only accept an offer they are aware of.
- Advertisements are generally not considered offers, with an exception for specific ads as seen in Lefkowitz.
Acceptance
- The Mailbox Rule states that acceptance is effective upon sending.
- Acceptance can be oral, written, or implied.
- Silence does not constitute acceptance unless otherwise agreed.
- The Mirror Image Rule requires that acceptance must exactly match the offer.
Termination of Offers by Action of Parties
- Counteroffer: Changing any part of the original offer constitutes a rejection and a new offer.
- Revocation: An offeror can revoke an offer before it is accepted.
- Rejection: The offeree declines the offer.
- Lapse/Expiration: Offers expire after a stated time or a reasonable time if no time is specified.
Termination of Offers by Operation of Law
- Legality: If the subject matter of the offer becomes illegal, the offer terminates.
- Death/Insanity of Offeror: The offer is terminated if the offeror dies or becomes insane.
- Destruction of Subject Matter: If the subject matter is destroyed, the offer is terminated.
Consideration
- Consideration is something of value exchanged between the agreeing parties.
- Consideration is not necessarily money, but it can be services, property, or forbearance.
- Consideration demonstrates the parties' intent to be bound by the contract.
Elements of Consideration
- Involves a detriment (sacrifice) or benefit (gain) for each party.
- It is a bargained-for exchange, which establishes a mutuality of obligation.
- This can be a promise for a promise, a promise for an act, or a promise for forbearance.
Absence of Consideration
- Gifts are unenforceable due to a lack of consideration.
- Illusory Promises: Promises with no real obligation are not valid consideration.
- Moral Consideration: Past moral obligations do not qualify as valid consideration.
- Past Consideration: Services already performed cannot serve as consideration.
- Pre-Existing Duty Rule: Performing a duty already legally obligated is not valid consideration.
Promissory Estoppel
- Promissory Estoppel is an exception to the requirement of consideration.
- A party makes a promise, another party relies on it, and the reliance causes harm.
- A court enforces the promise to prevent injustice.
Consideration Disputes
- Liquidated Debt: The sum is known and fixed.
- Unliquidated Debt: The amount is in dispute.
- Accord and Satisfaction: An agreement to settle a disputed debt.
Case References
- Lucy v. Zehmer: Intent is judged by an objective standard.
- Lefkowitz: Advertisements are not offers unless highly specific.
- Slick v. Reinecker: Quasi-contracts can be imposed to prevent unjust enrichment.
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Description
Explore the essentials of contract law: objective test, components (offer, acceptance, consideration, mutual assent, capacity, and legality) and classifications (bilateral and unilateral). Includes examples, legal requirements, and the Statute of Frauds.
