BCOR 3000 1nd Edition Lecture 11 Outline of Last Lecture I. Contract PartiesII. Contract CharacteristicsIII. Bilateral vs. UnilateralIV. Examples of Bilateral and Unilateral ContractsV. The Importance of FORMVI. Classifications—Formal vs. InformalVII. Quasi ContractsVIII. Contract InterpretationIX. Oral ContractsOutline of Current Lecture I. AgreementII. OfferIII. Special OffersIV. Offeree OptionsV. How an Offer DiesVI. AcceptanceVII. Effective TimesVIII. E ContractsIX. Shrink Wrap ContractsX. E SignatureXI. Federal E Sign ActXII. Key E Sign Act ProvisionCurrent LectureThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Chapter 10—AgreementAgreement• Offer + Acceptance• Offer issues:– Are the offer reqs. met?– If so, is it still open?....– or has it terminated?• Acceptance– Are the acceptance reqs. Met?Offer—3 basic requirements• Objective Intent• Terms that are reasonably definite or certain• Communication to the offeree• All 3 must exist for offer to exist***Will look at each in more detail***Offer Requirement #1• Objective intent– Does offeror intend to be bound?– Not if• Jest (Lucy v. Zehmer)—has to make sense; if it doesn’t then void• Anger—contracts made out of anger are invalid• Exploratory questions—trying to get an idea of where someone stand in a contract- Ex: going back and forth in terms of value; negotiating price of a car– Reasonable person standard• Based on all facts and circumstancesOffer Requirement #2• Terms reasonably definite or certain– Cannot be too vague (there need to be more specifics, dates, times for it to become a contract)– OK if some details missing (Ex: cleaning yard for $20/hour—don’t need to go into details of what tools will be used or what will exactly be happening)– Examples:• “…for a good price”• “…I’ll do some painting for you”Offer Requirement #3• Communicated to offeree– Not effective until offeree receives– Reward not due if finder did not know of reward– Only the specific offeree(s) can accept—if an offer is made to one person at a different rate it can only be accepted by that person. Anyone who over-hears cannot accept that offer. Only towhom the offer is made may accept.– Ex: You return a lost dog but did not know of a reward; B/c you did not know of the offer after returning it you are not eligible toreceive the reward ($$$).Special Offers• Advertisements—Not offers– It is more of an “invitation to deal”– Ex: A store advertises a gallon of milk for $3—that is not an offer.– Contract law: no need to honor ad price– …but statutes now require it• Very specific ads are offers• Car ads with stock numbers are offers, but for only one car> Under contract law—allows for a contract to be formed with price stated online (Internet Price).> Under truth and advertisement laws—allows for contract to apply toone vehicle• Ex: Realty Ad—not necessarily an offer; can be adjusted by realtor.• “Over Acceptance Problem”—Many people could accept an ad, for example, with an advertisement of property. This could create a problem b/c 3 people could be held in a contract. This is why advertisements are not offers, but more of an invitation to deal.• Ex: “First with $550.”—This is a unilateral contract because it is requiring action. If John Doe brings $550 to the seller first it is automatically his, even in Susie May brings $600 a few hours later.Offeree’s Options:1. Accept—forms contract– Neither can later unilaterally back out2. Reject—kills offer– Offeree cannot later accept– Once an offer is “killed” in can no longer be resurrected. A new offer can be made that is similar, but the prior offer can never come back to existence.– Even if you come back a few days later b/c you changed your mind, there is no offer to accept b/c it was killed with your rejection.3. Counteroffer– =Rejection + new offer4. ….or simply IgnoreHow does an offer die?• Offeree rejects or counteroffers• Offeror Revokes> Can take back offer as long as it is before the offeree accepts.• Lapse of Time– As stated….or if not, reasonable– I’ll sell you my car for $8000. Let me know by Tuesday. Contact will die after Tuesday if no response.• Subject matter destruction> If car gets flooded and destroyed, then offer is dead.• Death or incompetency• Supervening illegality>If an offer for cocaine is made and laws make it illegal after the deal,then the deal becomes dead.Acceptance• Unequivocal—has to be clear that you want to accept> “That sounds like a great deal/price.”—not sure, very unclear—no acceptance.> “Yes! I’ll take it”—clear—acceptance.• Must be identical to offer– Mirror image rule—the acceptance has to be identical to the offer.– Any change in terms = no acceptance• Usually treated as counteroffer or rejection• Ex: Offer: “Selling my Subaru Outback w/o the rack on top.”Offeree: “I’ll take your Subaru with the rack.” This is not acceptance because the terms were changed inthe process. They did not mirror each other, therefore no contract.Effective Times• Offer—when received• Acceptance—when sent– Mailbox ruleo As soon as it gets in the mail the contract is formed.o Yes, effective even if lost– Offeror has uncertain period> Use specific dates and times (October 10th at 10pm), not a time period (10 days).– Offeror can modify in offer> Offeror can modify acceptance by saying, “Your acceptance is accepted when I receive it in the mail.”• Rejection—when received• Revocation– when received• If one party makes a situation inconsistent then the person receiving the inconsistency gets to make the decision.***Offers, rejection and revocation are all enacted when RECEIVED. Acceptance is only enacted when SENT.***Counteroffer Example• Dealer says: “I’ll sell this car for $8,500.”• Buyer: “I’ll give you $8,000.”• Dealer “There is a mistake, that car should sell for $10,500, but we must let you have it for $8,500.”• What is wrong here?o The $8,500 is now dead with the counter offer.o Because there was a mistake previously, the new offer of $8,500 can be allowed.E Contracts• General contract law principles apply• Seller/Licensor usually sets the terms• Clicking is effective as acceptance• Unread