vad outline - General Contracts I. Precontractual Liability...

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General Contracts I. Precontractual Liability A. General Rule - reliance before Acceptance is not protected (in bilateral) aleatory view – rely at own risk B. Exceptions - 1. o’or can reasonably expect o’ee to rely before acceptance drennan v star: unjust not to make offer irrevocable, in case of subcontractor contracting with contractor then revoking before acceptance 2. unilateral contract, o’ee begins performance II. Contract Formation A. Types of Contracts 1. Unilateral a promise for an action contract is formed when o’ee completes performance of the bargained for action General rule: notice of acceptance is not required, assumed performance comes to attention of o’or 2. Bilateral a promise for a promise contract is formed when promises are exchanged General rule: notice of acceptance is required B. Offer and Acceptance 1. Offer – General concept – an offer confers upon the o’ee the power to create a k by stating “I accept” What is an offer: a proposal of sale (it includes the terms of the contract) a definite offer to sell and cannot be withdrawn after terms are accepted What is not an offer: a price quote is not an offer (Fairmount Glassworks) case law implication – offer is last bargain immediately before acceptance i. Advertisements Generally, ads are not offers, they simply open up negotiations Ad = offer when: 1. clear 2. definite 3. explicit 4. leave no room for negotiation Usually, ads are not offers b/c ppl make an unlimited demand, therefore when sale quantities are specified, the it can be read as an offer ii. Jokes If the offer is a joke then it is invalid
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Judgment from the basis of a reasonable standard in shoes of o’ee O’or usually bears mistake [thus judge bias in favor of o’ee] iii. Mistake in Offer If o’or made a mistake in offer, then he may retract If O’ee knew about the misake or should have known, then they should not have taken advantage of the o’or. Therefore o’or is not bound. Test: 1. did immediately inform o’ee of error? Yes, then may retract 2. was error clerical or judgment? Clerical, then may rertract 3. can o’ee be put back to status quo? Yes, then may retract 4. Was mistake material? Yes, then may retract 5. Do the adverse effects shock the conscience of court? Yes, then may retract Note: this test pattern is developed in Elsinore v Kastorff, and is developed for contracting, where it is reasonable that a contractor may make an honest mistake 2. Acceptance – General concept – Acceptance is the last act that closes the k The acts that constitute acceptance are defined by the terms of the offer It is a necessary condition to the existence of a k To accept an offer: 1. must know about offer 2. must be within the class of o’ee General rule: notice of acceptance required in bilateral k, but not in unilateral k (assume performance comes to attention of o’or) i. Silence as acceptance Generally, silence cannot constitute acceptance Rationale: to prevent unfairness, ie, o’or forcing k on o’ee by dictating
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This note was uploaded on 03/22/2008 for the course LAW con law taught by Professor Young during the Fall '07 term at University of Texas at Austin.

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vad outline - General Contracts I. Precontractual Liability...

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