BCOR 320 1nd Edition Lecture 20 Cont chapter 9 Sources of contract law Common Law Uniform Commercial Code UCC Article 2 governs the sale of goods Goods means anything moveable except for money securities and certain legal rights In a mixed contract Article 2 governs only if the primary purpose was the sale of goods Restatement Second of Contracts Elements of a contract Offer All contracts begin when a person or a company proposes a deal Acceptance Once a party receives an offer he must respond to it in a certain way Consideration There has to be bargaining that leads to an exchange between the parties Legality The contract must be for a lawful purpose Capacity The parties must be adults of sound mind Consent Certain kinds of trickery and force can prevent the formation of a contract Writing While verbal agreements often amount to contracts some types of contracts must be in writing to be enforceable Meeting of the minds The parties can form a contract only if they had a meeting of the minds They must understand each other and intend to reach an agreement These 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 A judge will make an objective assessment of any disagreements about whether a contract was made whether or not a reasonable person would conclude that there was an agreement based on the parties conduct The offer An offer is an act or statement that proposes definite terms and permits the other party to create a contract by accepting those terms Invitation to Bargain Invitation to bargain is not an offer An advertisement is generally not an offer A letter of intent may or may not be an offer depending on the writer s intent Problems with Definiteness The term of the offer must be definite Termination of the offer Termination by Revocation Effective when the offeree receives it Termination by Rejection If an offeree rejects an offer the rejection immediately terminates the offer Termination by Counteroffer If an offeree counteroffers it is a rejection that immediately terminates the offer Termination by Expiration When an offer specifies a time limit for acceptance that period if binding If the offer specified no time limit the offeree has a reasonable period in which to accept Termination by Destruction Destruction of subject matter terminates offer Illegality of subject matter terminates offfer Death or incompetency of either the offeror or offeree terminates the offer Irrevocable offer An offer is irrevocable when Written Signed by offeror Containing essential terms conditions including period in which irrevocable Supported by consideration Acceptance The offeree must say or do something to accept In a bilateral contract the offeree generally must accept by making a promise In a unilateral contract the offeree must accept by performing Mirror Image Rule Common Law Requires that acceptance be on precisely the same terms as the offer
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