Chapter11 - Agreement An agreement is the essence of every...

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Agreement An agreement is the essence of every contract. The parties to a contract are: 1. Offeror (who makes an offer); and 2. The Offeree (to whom the offer is made). If, through the process of offer and acceptance, an agreement is reached, and the other elements are present (consideration, capacity, legality), a valid contract is formed.
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Requirements of the Offer Under the common law, three elements are ` necessary for an offer to be effective: 1. The offeror must have a serious intention to become bound by the offer. 2. The terms of the offer must be reasonably certain, or definite , so that the parties and the court can ascertain the terms of the contract. 3. The offer must be communicated by the offeror to the offeree, resulting in the offeree's knowledge of the offer. Once an effective offer has been made, the offeree has the power to accept the offer. If the offeree accepts, an agreement is formed (and thus a contract, if other essential elements are present).
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Intention The first requirement for an effective offer is a serious intent on the part of the offeror. Serious intent is not determined by the subjective intentions, beliefs, and assumptions of the offeror. Under this theory, a party's words and conduct are held to mean whatever a reasonable person in the offeree's position would think they meant. The court will give words their usual meanings even if it were proved by twenty bishops that the party intended something else. Offers made in obvious anger, jest, or undue excitement do not meet the intent test, because a reasonable person would realize that a serious offer was not being made. Lucy v. Zehmer The case involves a business transaction in which boasts, brags, and dares "after a few drinks" resulted in a contract to sell certain property.
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The sellers claimed that the offer had been made in jest and that, in any event, the contract was voidable at their option because they were intoxicated when the offer was made and thus lacked contractual capacity. The court, however, looked to the words and actions of the parties--not their secret intentions--to determine whether a contract had been formed. What is not an offer…you ask? Expressions of Opinion. An expression of opinion is not an offer . It does not evidence an intention to enter into a binding agreement. For example: Hawkins took his son to McGee, a doctor, and asked McGee to operate on the son's hand. McGee said that the boy would be in the hospital three or four days and that the hand would probably heal a few days later. The son's hand did not heal for a month, but the father did not win a suit for breach of contract. The court held
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that McGee had not made an offer to heal the son's hand in three or four days. He had merely expressed an opinion as to when the hand would heal. Statements of Intention.
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Chapter11 - Agreement An agreement is the essence of every...

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