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bb.outline.kagreementrealbook - Contracts The Agreement...

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Contracts: The Agreement Corresponding Reading Assignment Text: Pages 358-368; middle of 374-top of 382; 390-95 1. Agreement- a reasonably definite understanding between two or more persons a. 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 b. If two or more persons, expressly or by implication, have reached a reasonably clear agreement as to what each party is to do, then that agreement shall be enforceable by the courts c. The courts are faced with the problem of deciding just what kinds of agreements are sufficiently definite to warrant judicial relief if they are breached d. The best approach is to break the agreement down into two parts- the offer and the acceptance 2. Intention of the Parties a. 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 b. It is the parties’ manifested intentions that control, rather than their actual intentions c. “objective intent ” is referred to as a person’s apparent or manifested intent d. “subjective intent ” is the actual or secret intent e. The test used by the courts is called the “objective test” f. There must only be a legal, or apparent, meeting of minds g. Two reasons for the frequent use of this objective view: i. Virtually impossible for a court to determine what a person’s actual intent was at a specific moment ii. It would be unfair to allow someone to indicate a particular intention to another person and then to come into court and claim that he or she did not mean what was apparently meant 3. Requirements of the Offer a. The offeror must manifest a definite, present willingness to enter a contractual relationship with the other party i. Sometimes the manifestation is referred to as a conditional statement of what the offeror will do for the offeree b. Elements i. A manifestation of an intent to contract ii. A reasonably definite indication of what the offeror and the offeree are to do; and iii. A communication of the proposal to the intended offeree c. Intent to Contract i. Preliminary Negotiations 1. Language is so tentative or exploratory in nature that it should be apparent that an immediate contract is not contemplated such communications do not constitute offers 2. Also known as “ dickering 3. Inquiries - request for information do not manifest a genuine intent to contract 4. Richards v. Flowers et al. (page 360) ii. Other evidence on the question of intent 1. Courts will take into account relevant evidence from several other sources if it sheds light on what reasonable people in circumstances probably would have intended, such as: a. Evidence of well-established custom in the industry in which the parties are members, assuming that the parties have not stated otherwise in this transaction b.
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