Contract Law: Mutual Assent Flashcards

Questions and Answers

What is a contract?

A promise or set of promises for the breach of which the law provides a remedy, or the performance of which the law recognizes as a duty.

What are the two elements of contract formation?

Mutual Assent and Consideration

What does mutual assent entail?

Both parties objectively demonstrate an intent to be bound and have a sufficiently definite agreement.

What is the 'Objective Test' for mutual assent?

It looks at the conduct of the parties from the perspective of a reasonable person rather than their actual intentions. Signup and view all the answers

What is the 'Subjective Test' for mutual assent?

It considers the actual intentions of a party rather than their conduct. Signup and view all the answers

What test does contemporary contract law abide by in determining mutual assent?

The Objective Test. Signup and view all the answers

What is an offer?

A manifestation of willingness to enter into an agreement expressed in such a way that the receiving party can conclude the transaction. Signup and view all the answers

What are the ways an offer can be terminated?

Revocation, Counter offer, Rejection, Death, Incapacity of offeror or offeree, Failure to accept within a reasonable time period, Lapse of time. Signup and view all the answers

What is the 'Mirror Image Rule'?

Acceptance must mirror the terms of the counter offer. Signup and view all the answers

What is the 'Mail Box Rule'?

Acceptance is valid when sent and not received. Signup and view all the answers

Are advertisements considered offers?

Generally, no, ads are construed as invitations for offers. Signup and view all the answers

What is a breach of contract?

A breach of contract occurs through non-performance or defective performance of contractual obligations. Signup and view all the answers

What is an option contract?

An agreement to hold an offer open for a specified time period with consideration. Signup and view all the answers

Study Notes

Contract Fundamentals

A contract consists of promises that are legally enforceable, providing remedies for breaches.
Two essential elements of contract formation are Mutual Assent and Consideration.

Mutual Assent

Mutual Assent requires both parties to show intent to be bound and a sufficiently definite agreement.
It can be established through a valid offer and acceptance but can also exist in the absence of a formal offer/acceptance.
Objective Test focuses on the reasonable person's perspective regarding the parties' conduct, rather than their subjective intentions.

Tests for Mutual Assent

The Objective Test is the standard in contemporary contract law to determine Mutual Assent, avoiding assumptions about parties' mental states ("meeting of the minds").
The Subjective Test analyzes the actual intentions of the parties involved.

Offers in Contracts

An offer is a willingness to enter an agreement, enabling the receiving party to conclude the transaction with no further actions needed, except for assent.
Offers can be terminated through rejection, counter-offers, lapse of time, revocation before performance, death or incapacity of either party.

Counter Offers and Acceptance

A counter offer effectively rejects the original offer and proposes new terms.
Acceptance must mirror the terms of the counter offer, adhering to the "Mirror Image Rule."

Time Frames and Revocation

If no time for acceptance is stated, a reasonable time is allowed; however, option contracts restrict revocation during their specified term.
Revocation procedures for bilateral contracts require communication to the offeree, either directly or indirectly.

Unilateral Contracts

An offer for a unilateral contract seeks performance in exchange for a promise and can be revoked before performance is complete, with certain limitations after performance begins.

Certainty in Agreements

The terms of an offer must be reasonably certain to form a valid contract; vague terms may lead to unenforceability.
Ambiguities in an offer can allow for acceptance by either promise or performance.

Preliminary Agreements

Agreements lacking full negotiation may be unenforceable if one party intends to finalize terms later.
Classic common law viewed these agreements as unenforceable, while contemporary law seeks evidence of mutual assent for possible enforcement.

Acceptance Types

Acceptance of an offer must be in the manner specified and can be by promise (bilateral contracts) or performance (unilateral contracts).
Partial performance can suffice for acceptance in unilateral contracts, whereas bilateral contracts need complete acts essential for promise formation.

Breach of Contract

Breach occurs through non-performance or defective performance of contractual obligations.

Advertising and Offers

Advertisements are typically not considered offers but invitations for offers unless they contain definite terms or identifiable offerees.

Mail Box and Telephone Rules

The Mailbox Rule dictates that acceptance is valid upon being sent, not received.
The Telephone Rule states that an offer ends when the conversation concludes.

Description

Test your knowledge on contract law with these flashcards focusing on mutual assent and contract formation. Each card highlights key definitions and concepts essential for understanding the legal principles of contracts.