LEB 320F Book Notes/Outline Chapter 12

LEB 320F Book Notes/Outline Chapter 12 - CHAPTER 12 THE...

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CHAPTER 12 THE AGREEMENT Intention of the Parties Requirements of the Offer Termination of the Offer The Acceptance The first and foremost element of any contract is an agreement —a reasonably definite understanding between two or more persons. It is for this reason that the liability or obligation resulting from the making of a contract is sometimes described as being “consensual” in nature. The usual view taken by the law today is that if two or more persons, expressly or by implication , have reached a reasonably clear agreement as to what each party is to do, the that agreement shall be enforceable by the courts (assuming, of course, that the additional elements of consideration and legality are also present). This means that if either party refuses to perform his or her part of the agreement without a lawful excuse , the other party is entitled to recover damages in a breach of contract action . On the other hand, if it is found that a legally sufficient agreement has not been formed, neither party has contractual liability to the other. The best approach to determine what kinds of agreements are sufficiently definite to warrant judicial relief if they are breached is to break the agreement down into two parts —the OFFER and the ACCEPTANCE . After being broken down the inquiries then become whether either party made an offer to the other , and, if so, whether the offer was followed by an acceptance . INTENTION OF THE PARTIES In cases where the parties disagree as to whether their communications constituted an offer and an acceptance, the court will frequently emphasize the principle that the intention of the parties is controlling . If the court finds that their intentions were the same (that there was a “ meeting of the minds ,” as it is sometimes phrased), then there is a contract . CAUTION: When the courts view the parties’ communications for the purpose of determining whether their intentions were on and the same , it is the parties’ manifested (or apparent) intentions that control, rather than their actual intentions .
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A person’s manifested or apparent intent is frequently referred to by the courts as objective intent , while actual or secret intent is called subjective intent . Thus the TEST USED BY THE COURTS that is described here is referred to as the OBJECTIVE TEST .” EXAMPLE: If X writes a letter to Y containing a proposal which meets the legal requirements of an offer, and if Y promptly accepts the offer in a return letter, there is a contract —even if X later claims to have had some mental reservations about the proposal, or says that he really did not intend his letter to be an offer. When it is said that there
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LEB 320F Book Notes/Outline Chapter 12 - CHAPTER 12 THE...

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