1. ES 2.00 UNDERSTAND CONTRACT LAW
Obj Understand the elements and characteristics of a contract

2. Elements of a Contract Offer Acceptance Genuine Agreement/Assent
Consideration
Capacity
Legality
All elements MUST be present to be an enforceable contract.

3. OFFER
Proposal by one party to another with intent to create a legal binding agreement
Offeror
Makes the offer
Offeree
Offer made to this person

4. Requirements of an Offer
Serious Intent
Must intend to make the offer
Advertisements?
No serious intent
Known as an invitation to negotiate
Definite and Certain
Must use definite words
Communicated to the Offeree
Phone, fax, Internet, letter, etc

5. Termination of Offer Revocation – Taking back of an offer by offeror
Rejection – Refusal by the offeree
Counteroffer – Any change in the terms of the offer
Death – Offeror dies
Insanity – Offeror is declared insane
Expiration of Time – If the offeror puts a time limit on the offer and it has passed
Destruction of the subject matter

6. Options & Firm Offers
Option – the offeree gives the offeror something of value in return for a promise to keep the offer open for a set period of time
Firm Offer – a written offer for goods that states the period of time during which the offer will stay open
No additional consideration is required
Maximum period of time set by the UCC – 3 months
Offeror must be a merchant who deals in related goods on a daily basis

7. ACCEPTANCE
Unqualified willingness by the offeree to go along with the offer
Mirror Image Rule
Terms of the acceptance must match exactly (mirror) the terms of the offer
Any change means there is no acceptance (counteroffer)

8. Methods of Acceptance Bilateral Acceptance Unilateral Acceptance
Offer is accepted by offeree through communication of the promise to the offeror
Only requires giving a promise to perform, not performance itself
Most offers are bilateral
Unilateral Acceptance
Offeror promises something in return for offeree’s performance and indicates that performance represents acceptance
Silence as Acceptance
Does not represent acceptance
Offeror cannot word offer in a way that silence would be considered acceptance