Exam Review Topics Tuesday 3pm wjb 2004 50 MC TF more MC then TF 6 short answer pick 5 to answer first 5 are graded Sale of goods questions assume common law applies unless stated otherwise Chapter 9 Formation of Traditional and E Contracts Mailbox rule what is it how does it work How does it work when the offer is revoked o Mailbox rule aka deposited acceptance rule Acceptance takes effect thus completing formation of the contract at the time the offeree sends or delivers the communication via the mode expressly or impliedly authorized by the offeror it is the default rule under contract law for determining the time at which an offer is accepted states that an offer is considered accepted at the time that the acceptance is mailed Under this rule if the authorized mode of communication is the mail then an acceptance becomes valid when it is dispatched NOT when it is received by the offeror This rule does not apply to instantaneous forms of communication such as face to face telephone fax and usually by e mail o How does it work when the offer is revoked The offeror s act of withdrawing an offer is known as revocation Revocation may be accomplished by either of the following 1 Express repudiation of the offer such as I withdraw my previous offer of October 17th 2 Performance of acts that are inconsistent with the existence of the offer and are made known to the offeree for instance selling the offered property to another person in the presence of the offeree o You have an offer offer is considered accepted when its in the mail o Revocation does not occur after it is placed in mail o Acceptance has to beat rejection to offer o the moment the acceptance letter is sent it is a contract however the offeror can work around it by simply stating offer of acceptance is not effective until received Elements of an offer a promise or commitment to do or refrain from doing some specified action in the future o Identify 1 Who the parties are 2 the time for performance how long it will take 3 the price 4 the subject matter o Have to have all four General rules of communication of offers acceptance by someone other than the offeree o The third requirement for an effective offer is communication the offer must be communicated to the offeree Ordinarily one cannot agree to bargain without knowing that it exists ex Tolson advertises a reward for the return of her lost cat Dirk not knowing of the reward finds the cat and returns it to Tolson Usually Dirk cannot recover the reward because an essential element of a reward contract is that the one who claims the rewards must have known it was offered o An offer can only be accepted by whom the person the offer is made to Detrimental Reliance o Detrimental reliance is a term commonly used to force another to perform their obligations under a contract using the theory of promissory estoppel Promissory estoppel may apply when the following elements are proven A promise was made Relying on the promise was reasonable or foreseeable There was actual and reasonable reliance on the promise The reliance was detrimental Injustice can only be prevented by enforcing the promise o Person who made the offer may be prevented from pulling the offer out o Ex talking about deal to buy car don t have a garage so I build a garage under expectation you will sell me the car you are detrimentially reliant to sell me that car Legal Detriment as consideration o If you give up something you legally have the right to do o Giving up drinking if already 21 o If youre 18 and you promise grandpa to go to vegas and not gamble grandpa says hell give you 500 if you don t gamble it s a legal detriment cause you have to the right to gamble since your 18 Unilateral mistake mutual mistake consequences of each o Unilateral mistake is made by only one of the parties A unilateral mistake does not give the mistaken party any right to relief from the contract The contract is enforceable unless the other party knew or should have known that a mistake was made or mistake was due to substantial mathematical error made inadvertently and without gross negligence ex Elena intends to sell her jet ski for 2 500 When she learns that Chin is interested in buying a used jet ski she sends him an e mail offering to sell the jet ski to him When typing this e mail however she mistakenly keys in the price of 1 500 Chin immediately sends Elena an e mail reply accepting her offer Even though Elena intended to sell her personal jet ski for 2 500 she has made a unilateral mistake and is bound by the contract to sell it to Chin for 1 500 o One party of contract has made a mistake of material fact o Bilateral mistake mutual a mutual misunderstanding concerning a basic assumption on which the contract was made If the parties to the contract attach materially different meanings to the term a court may allow the contract to be rescinded because there has been no true meeting of the minds Ex L H construction company contracted with Circle Redmont Inc to make a staircase and flooring system Circle Redmont s original proposal was to engineer fabricate and install the system Installation was later cut from the deal In the final agreement payment was due on Circle Redmont s supervision instead of completion of installation But the final contract still included the wording engineer fabricate and install Later Circle Redmont claimed that this wording was a mistake L H insisted that installation was included and filed a suit against Circle Redmont The court held that the use of the word install in the contract was a mutual mistake Circle Redmont s witnesses stated that the parties had agreed that Circle Redmont would only supervise the installation not perform it The court found the witnesses were credible and ruled that the installation was not included o Both parties are mistaken about the material fact of the contract Offers Counteroffers Acceptance Rejection Mirror Image Rule o Offer a promise or commitment to do or refrain from doing some specified action in the future o Rejection If the offeree rejects the offer by words or conduct the offer is terminated o Counteroffer a rejection of the original offer and the simultaneous making of a new offer ex Burke offers to sell his home to Lang for 270 000 Lang responds your price is too high Ill offer to purchase your home for 250 000 Pawn Stars does this all day long o Mirror Image Rule requires the offeree s acceptance to match the offeror s offer exactly to mirror the offer
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